Many filers discover after having mailed in their Form 1040 that they
made a mistake, such as missed deductions or understated income. Not
to worry, says tax guru Julian Block. Here, he explains what a filer
must do to amend 1040 depending on their error and how to minimize the
chance of IRS audits.
When Form 1040 time rolls around, I receive queries from filers who
made mistakes on their 1040s. They want to know how to fix their tax
errors, and I tell them not to worry: Usually, they can still set
things right after the fact.
This series will respond to a query from a freelance writer based in
New York City. Like a lot of other filers, her tax tribulations began
when she scanned her already-mailed 1040 and felt a little jolt of
panic when she realized that she messed something up. To soothe her, I
reminded her that she was hardly alone. That’s why the Internal
Revenue Service offers what it characterizes as an easy way for her to
correct filing errors, such as missed deductions or understated or
overstated income.
The tool she needs is a two-page form called Amended U.S. Individual
Income Tax Return, or Form 1040-X, formerly 1040X (so named, I like to
think, because it lets a filer “X-plain” her mistakes). The IRS
mandates its use to justify changes to a filer’s original return and
compute any resulting refund or balance due.
Claim game. For starters, I reminded her that the 1040-X comes with
its own set of tricky rules. What follows are tips on how to fill it
out and set things right with the IRS.
First, she must file a separate 1040-X for each year in which she is
claiming a refund or acknowledging that she is underpaid. This is the
case even if she has made a similar mistake in more than one year
because a claim filed for one year doesn’t automatically put the IRS
on notice that she seeks a refund or that she underpaid in another
year. Along with her 1040-X, she should submit any applicable
correspondence from the IRS and corrected versions of her 1040s.
For example, let’s say she forgot to take advantage of the child-care
credit (for 2021’s 1040, it’s a Part II, Line 13g), which gives her a
tax break on money paid to a caregiver for her children. No problem:
Along with 1040-X, she can submit Form 2441, Child and Dependent Care
Expenses, just as she would have to claim the credit on her original
return. Or, let’s say she needs to correct the number of wages or
taxes withheld (for 2021’s 1040, it’s Lines 1 and 25) that she
reported for the year in question. She should attach a copy of any
additional or corrected W-2 forms that she received after she first
filed. Suppose her mistake was simply due to her misreading a correct
W-2 form. Chances are, the IRS computers will catch it, but she should
still send in a 1040-X and explain the error.