Timing Is Everything: When to File Your 1040-X
If you find yourself in a dilemma needing to change a tax return, here is what you want to avoid. To begin with, if the amended return is just going to give you a larger refund and it’s not something that’s fixable like a math error or you used the wrong SSN for a dependent for example, or you got a notice because a form was missing, then you want to wait until the original return processes first. If you have plenty of time, the amended return once received will freeze any credits on the first return until the amended return processes. Now if it’s close to the statute of limitations for a refund, which is three years from the original due or extended due date or two years after you paid the tax, then send it in ASAP. Knowing how to amend a tax return efficiently is critical, and it all starts with the right timing. If you’re unsure, then call the IRS to get clarification.
Calling the IRS may be harder right now. The IRS has less than a 20% level of service on the phones and you will have trouble getting through. Hopefully they allow more people to take calls later. But loads more people will be calling as the 2025 opens in early 2025.
Filing for Clarity: How to Amend a Tax Return Requires Explanation
I have people working at the IRS and one told me he used to take calls all day long. Now he has been working two hours at the start of the day and the rest of the day he processes amended returns. Yes, someone will be looking at your forms and trying to figure what you wanted to do. Sure they want to try and get the IRS computer to start doing that and maybe one day that will happen on a widespread basis. But my IRS person told me some of these returns come in poorly written and with inadequate explanation of the reason for the amended return.
What to Include When Filing Form 1040-X
When you filed the original return electronically, you should be able to file the amended return electronically. If it’s older return or maybe you just can’t find a software company willing to let you file that return then you have to do it on paper.
But if you can use a software company to prepare the amended return it will generate the 1040X (the amended return) and it will include all the forms that were needed for that year’s return. It will even generate a new Form 1040 with all the numbers as the return should be. I recommend this: if you have all those forms and do have to mail the amended return in then, you want to include all the forms, the 1040X, the new version of the 1040, and all the forms.
Technically you only have to include the 1040X, any forms changing or being added, any new W-2’s, W-2G’s and any 1099-R’s (with withholding on them). But sending everything will hopefully head off a delay.
Avoiding Delays and the 916C Letter
As I said be clear and explain where the IRS person can understand what you are changing. Remember there are a lot of IRS people processing amended returns and they didn’t receive thorough training. If they can’t figure out what you are changing. For example, you are lowering your adjusted gross income and the IRS person can’t see how you got there they will send you a letter asking for the information, an explanation, or a missing form and expect you send it back within 30 days. They will allow a bit more time, but not that much more. If you don’t respond in time the amended return you sent in will be closed out and 916C letter will be sent to you. At that point you will be starting this whole process again.
I’ve been told preparers have sent in returns loaded with mistakes and poorly explained. Don’t assume the preparer is doing this right. Look at what the preparer is submitting. Get a copy for your records, including works and all forms. If you still can’t understand, I suggest having the preparer explain it to you.
Understanding the 1040-X and Tracking Your Status
The 1040X isn’t hard. There are three columns: column A is the original figure from the first return, column B is the change (either negative or positive), and column C is the amended or correct figure. The instructions give clear line by line instructions too.
You just want to avoid any delays in the 16-week process. And remember if you got a notice on your first return to verify you filed that one. Do that first. If the IRS gets an amended return and the original return is waiting to be verified, they allow a certain amount of time and they will close out the amended return or push it to side and send you more letters!
And you can keep tabs on the 1040X by clicking on irs.gov under refund on the link for Where’s My Amended Return. By knowing how to amend a tax return correctly will help you eliminate the extra trouble in the future.
