Article written by:
Hanna Trotter, CPA
So you were spring cleaning the kitchen table and found a 1099 from that new investment account you forgot about, but you already filed your tax return! What do you do? Most likely this means you will need to file an amended return. Amended returns can be filed when there is a change in filing status, the number of dependents claimed, income, deductions or credits. Amended returns are not meant to be used to correct mathematical errors – the IRS will correct this and send you a notice in the mail (the IRS stresses that it does not first contact taxpayers with a phone call or e-mail, and that any initial communication via these avenues is most likely fraudulent).
The first step in amending a return is to contact your tax preparer and provide the support for the change so that it can be determined if you will need to file Form 1040X. In the case of the surprise 1099, it is best to report the income as soon as possible in order to avoid penalties and interest from accruing on the additional tax liability that will likely be due. If you are amending your return to report additional deductions or credits and will be receiving a refund, you have three years from the date you filed the original tax return or two years from the date you paid the original tax, whichever is later. However, you must wait until your original refund has been paid to you, if applicable. Your tax preparer will be able to prepare the amended return for you, as they already have all of the information that will need to be included with the amended return (original return, all affected schedules, etc.). If you used a self-prep service, they do offer amended return services but you may need additional guidance. The IRS offers thorough instructions for amended returns on its website.
Once the amended return is prepared, you will need to sign and mail Form 1040X and the required attachments to the address provided in the instructions or by your tax preparer. It is recommended to mail this return via certified mail. If there is additional tax liability due with the amended return, it should be paid immediately. If a refund is due, the IRS will issue the refund once the amended return is processed. Amended returns can take up to 16 weeks to be processed. There is a “Where’s My Amended Return?” tool online that is available three weeks after the IRS receives the return.
After the IRS processes and approves your amended return, you may need to amend your state return as well. Each state is different, but most require you to wait until the federal amendment is accepted. If you have any questions or need your return amended, you should contact a GBQ professional to discuss your options.