April 17, 2023 | Posted in:

What is an amended tax return and when do I need one? (Video)

What is an amended tax return and when do I need one?

If you file a tax return and you find out later that it was wrong for some reason, you can file an amended tax return, which is essentially just a do over. We use a special form called a 1040 X. This lists all the numbers that were on the original return, any changes that we need to make, and it calculates any additional tax or refund due.

What are examples of why you might need to do this?

You might get a corrected broker’s statement. You might get a corrected W-2 or an amended K-1. You may realize that you left off some of your income. You might realize that you left off a large deduction.

We don’t always amend returns when we find out they’re wrong however. Sometimes the changes are very minor. Lots of our clients get amended broker’s statements after we file the return and the tax would only change by a few dollars, so we don’t bother amending for these small things. Sometimes they forget to give me deduction. We might not amend because the amount of tax they could save by the increased refund would be much less than the fees associated with preparing the amended return.

Sometimes we amend the tax return, even when the tax itself doesn’t change at all. Say you had a K-1 that showed a loss. You may get an amended K-1 that had a larger loss. Though your tax won’t change at all because maybe you couldn’t take the loss due to passive activity rules or at risk rules, but you would want to amend so that you were carry-forward of your suspended losses is correct.

How much time do I have to amend my tax return?

You don’t have forever to amend a tax return. If you’re going to file an amended return and ask for a refund, you have to do it within three years of the date that you filed the original return.

If the IRS discovers that your return was wrong for some reason and they send you a tax notice, you don’t have to do an amended return. You can simply pay the amount due on the notice, and that takes care of everything.

For assistance in correcting errors and amending your tax return or simply in need of more information, contact an Alloy Silverstein advisor today!


Video: What is an amended tax return and when do I need one?


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Julie Strohlein CPA

Associate Partner
Julie has over 20 years of experience in public and private accounting, representing varied clientele including the medical, legal, and real estate industries and trusts.
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