You've filed your return, you've received your refund check, and you don't want to think about last year's taxes again. Oops! You discover you made a mistake on your return.
You might have overlooked a big deduction, you might find a missing receipt, or come across a dividend check that you didn't report. Don't worry. You can correct the mistake by filing an amended return.
Sometimes there's not even a mistake on your original return. For example, you might find out that stock you own became worthless in an earlier year. You have to claim the loss in the year the stock became worthless, so you file an amended return for that year.
Whatever the reason, it's a relatively simple process. If you're an individual, you file Form 1040X. Corporations use Form 1120X.
As a general rule, you have three years to file an amended return, or two years from when you paid the tax, whichever is later. You may have longer if you're carrying back business losses or claiming a worthless security. You'll have to fill out a separate form for each year that has changed.
You won't need to complete a whole new return, however. On Form 1040X, you just show the items that have changed and compute the difference in tax for the year. If the change means a bigger refund, the IRS will send it to you. If you owe more tax, you should pay it when you file the amended return.
If you think one of your earlier returns was wrong, please give us a call. We can assess the problem and file an amendment if needed.
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