How Form 1040X Works
When you file Form 1040X, it becomes your new tax return for that year. The entries you make on Form 1040X change your original return to include new information. You must have filed your original tax return before you can file Form 1040X. If you haven’t filed, Form 1040X isn’t necessary. You can just make the corrections on your original form. Make sure you’ve received confirmation from the IRS that they’ve received your Form 1040 before you submit an amended form.
When To File Form 1040X
If you want a credit or refund, you must file Form 1040X within three years (including extensions) from the date you filed your original return or within two years from the date you paid the tax, whichever is later. If you received an IRS notice. You may have received a notice from the IRS letting you know about an error on your return or that you didn’t report income. Your first priority is to find out what happened and make the correction. Note the deadline for response on the notice! If you find out you missed a credit or deduction, you’ll want to file Form 1040X to get the credit or refund. You might have missed a tax-loss carryback for your business, a disaster-casualty loss, or a refund for a deceased taxpayer, for example. The IRS has specific qualifications and limits for these and other types of errors.
Mistakes That Don’t Require 1040X
If you made just a small mistake, you don’t have to go to the trouble of filing an amended return. The IRS will fix basic math errors and it will contact you to tell you if you forgot to include a form or schedule. You can just send in the missing form at that time.
Correcting Errors on Schedule C
Amending an incorrect Schedule C and sending the changes to the IRS is a two-step process. First, you must make the changes to Schedule C, and this means preparing a new one. You don’t have to mark it as amended in any way, and there’s no additional special form for this. Recalculate everything on Schedule C after you’ve made the changes. For example, if you corrected your cost of goods sold, this will affect your total for net income. Now you can transfer the accurate information from your new Schedule C to your personal 1040. The IRS suggests that the easiest way to figure the entries for Form 1040X is to make the changes in the margin of the original tax return and then transfer the numbers to Form 1040X.
Transfer Schedule C Changes to Your Tax Return
When you have figured out the error, it’s time to complete the main part of the form. Each line on the form corresponds with a line on your Form 1040. The columns look like this: Here’s a more detailed step-by-step way to get the change from Schedule C to your 1040X form:
Correcting the Self-Employment Tax Calculation
Don’t forget about self-employment taxes.If your error in your Schedule C affected your business net income calculation, you will have to change the self-employment tax calculation on Schedule SE. Go through the same process for this form as you did for the Schedule C and make the changes on your 1040X form.
How To File Form 1040X
The easiest way to file Form 1040X is electronically through any tax provider or on the IRS website. You can also send the return and your amended Schedule C to a specific location depending on the reason you’re submitting it and where you live. See the Instructions for Form 1040X for details and a list of addresses.
How To Pay Your Tax Bill with 1040X
Filing Form 1040X doesn’t include paying any tax due. If your error results in additional tax due, be sure to pay as soon as possible to avoid fines and penalties on the unpaid balance. You can include a check or money order when you file the form. You can also use one of the IRS-approved payment options. Your changes to Form 1040X might result in interest and penalties if you underpaid your taxes based on your inaccurate Form 1040. But don’t include any interest or penalties on Form 1040X. The IRS will calculate these amounts if they apply and send you a bill.
Received a letter from the IRS instructing you to do soYou realize you missed out on tax credits or deductions included on your original return
The IRS will correct minor mistakes like incorrect math on its own.
