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Made a tax return mistake? Fix it by X-filing an amended return

Tax return mistake oops

Most folks right now are working on filing their 2021 tax returns for the first time. But since it's Groundhog Day — in case you missed it, Punxsutawney Phil saw his shadow, so we're looking at six more weeks of winter (boo!) — today seems like the perfect time to also look at amending a tax return.

Taxes are complicated, so tax mistakes on 1040 forms are common. In situations where you've made a relatively minor common error on your return, such as transposing an amount that the Internal Revenue Service can correct using its copy of a third-party tax statement, the agency will correct it during processing.

However, there are certain situations where you might need to file an amended return, known as Form 1040-X. That's an excerpt of the two-page form below.

1040-X amended return revised July 2021 excerpt
See more tax forms and more about them at Talking Tax Forms!

When to X file…or not: As noted, When correcting the mistake means you get more money or a lower tax bill, this tax do-over opportunity definitely is much more welcome that the almost 34 years of repeats endured by Bill Murray's movie weatherman in "Groundhog Day."

But even if your correction ends up costing you, it's still a good idea to ensure your filings are accurate. It also could save you added taxes, penalty charges, and interest that will start adding up from when the mistake was made.

If you wait for the IRS to find the error, be it mere months or many years later, the accrued tally could be dramatic. But if you catch and fix the unpaid tax mistake first, your Form 1040X filing will stop those added charges as soon as the IRS gets the corrected information.

If you do find you need to 1040-X file, here are seven tips that could help.

1. Start with the IRS' Interactive Tax Assistant. You can use Should I file an amended return? at IRS.gov to help determine if you should file an amended tax return. As mentioned, you generally don't need to amend a filing for math errors. However, do file an amended return if there's a change in your filing status, income, deductions, credits or tax liability. The IRS amended return online tool can help you determine if you need to re-do your return.

2. Get your timing right. Generally, to claim a refund, you must file Form 1040-X within three years after the date you filed your original return or within two years after the date you paid the tax, whichever is later. Returns filed before the due date (without regard to extensions) are considered filed on the due date, and withholding is deemed to be tax paid on the due date. If you find your mistake quickly and it means you get more of a refund, the IRS says chill. You should wait for the IRS to process the original refund producing return and your get your tax cash before you file a 1040-X to claim an additional refund.

3. File your X form electronically. Yes, it's now possible to e-file Form 1040-X, but only in more recent situations. You can submit an amended return using tax software products for tax years beginning with 2019 and after. And those relatively recent Forms 1040 and 1040-SR that you want to correct must have been filed electronically.

Where e-filing isn't possible, you still can submit a paper version of Form 1040-X. Be sure to check the address to use for snail mailing an amended return in the "Where To File" section of the 1040-X instructions.

And if you're filing Form 1040-X in response to an IRS letter about your return, mail it to the address shown on the letter.

4. Use separate X forms when amending multiple tax years. If you find one year's mistake led to others, you might need to amend multiple tax returns. In this case, the IRS asks that you file and submit a separate Form 1040-X for each tax year. This will help avoid confusion (as much as possible!) for both you and the tax agency. Check the box for the calendar year or enter the other calendar year or fiscal year that you are amending on each 1040-X.

5. Pay additional tax. Remember when I said you should amend a return even if it costs you? In these cases, when you file your Form 1040-X, pay as much of the tax as soon as possible. This will stop or reduce penalties and interest. You have a variety of options to e-pay your taxes.

6. Check your state filings. Changes to your federal tax return likely mean changes to your state taxes, too. Check with your state's tax department for details and the steps you need to take at that tax level.

7. Track your amended return status online. You can check the status of an amended tax return by using the online IRS tool Where's My Amended Return? It's available in in English and Spanish. But don't check too soon. Amended return processing can take up to 16 weeks after the IRS receives it.

Once your 1040-X is accepted by the IRS, you can check the online tracking tool daily. That's how often it updates, usually at night.

However, there are some amended filing situations where Where's My Amended Return? can't help. It cannot give you the status of the following returns or claims:

  • Carryback applications and claims
  • Injured spouse claims
  • A Form 1040, U.S. Individual Income Tax Return marked as an amended or corrected return (not a Form 1040-X, Amended U.S. Individual Income Tax Return)
  • An amended return with a foreign address
  • A business tax amended return
  • An amended return processed by a specialized IRS unit, such as the Examination or Bankruptcy departments.

Note, too, that if you're getting a refund (or a larger one) based on your amended return, you're going to have to wait for your mail carrier to deliver it. Right now, the IRS isn't set up to directly deposit refunds from a 1040-X, even an e-filed one.

Repeat viewing of "Groundhog Day": If you don't have any erroneous tax worries on Feb. 2, then you have time to watch, or watch again, the classic 1993 film.

Below is a MovieClips look at the confusion of Phil Connors, the Pittsburgh weatherman played by Bill Murray, as he encounters his first repeat Groundhog Day.

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