“The only real mistake is the one from which we learn nothing.” – Henry Ford
You finally sent off your tax return via e-file (or perhaps the not-yet-totally-retired paper method). Phew. What a weight off your chest.
And then it hits you…
You forgot to include income from a special one-off contracting project. Or maybe you found the documentation you needed to fully claim that one deduction after you hit send.
Don’t worry – tax return mistakes happen… and, you can fix them. The IRS gives you a second chance through Form 1040-X, which lets you make corrections to your income, deductions, credits, or even filing status. Basically, anything that affects how much tax you owe or get refunded.
But before you rush to make this right, there are a few things you need to know…
First, you can’t amend a return until your original has been fully processed. And with processing delays due to the IRS layoffs currently happening (which I talked about in more detail last week), that might take even longer than normal.
But it’s important to wait, because amending your return too early could cause confusion or delay your correction from being accepted properly.
Another thing to know: not all tax return mistakes actually need to be amended. Certain issues the IRS will automatically fix (like math errors), and sometimes they’ll just send you a notice instead.
Here’s a quick list of amending green lights:
- You received a new or corrected tax form after filing (like a late W-2, 1099, or K-1).
- You overlooked some income (think one-off freelance gigs, unemployment benefits, dividends, crypto transactions, etc.).
- You need to change your filing status because you had a baby or got divorced right before the tax deadline.
- You claimed the wrong number of dependents (your oldest filed his own return this year), or forgot to claim someone (an aging parent?).
- You missed a credit or deduction.
- You made an error with retirement contributions, HSA distributions, or IRA deductions.
- You misreported self-employment income.
- You discovered a mistake in your tax calculation or refund amount.
- You want to change an election (like depreciation method or installment sale treatment, for example).
And when amending isn’t proper IRS etiquette?
- Your return was rejected during e-filing – just fix it and resubmit.
- You made a simple math mistake.
- You forgot to attach a form. The IRS will send you a letter requesting it.
- You received an IRS notice, and you agree with the change.
- You’re waiting for a stimulus credit or other federal benefit. Those are often corrected automatically.
Once you’ve determined that you do need to amend, you’ll file Form 1040-X, as I mentioned earlier. You don’t need to redo your entire return from scratch – just update the parts that need correcting. (And if you’re amending multiple years, file a separate 1040-X for each year.)
When you fill out the form, you’ll report the original amount from your return, show the net change (increase or decrease), and list the corrected amount. You’ll also include any new or corrected forms (W-2s, 1099s, etc.) to support your changes.
There’s an “Explanation of Changes” section for your tax return mistakes. This is not the place to be poetic – keep it clear and specific. Write a summary along the lines of, “Received a corrected 1099 from XYZ Brokerage on April 2, 2024, reporting an additional 1.2K of dividend income.”
If your amendment results in more tax owed, pay it as soon as possible to cut down on interest and penalties. And if it results in a refund, be aware that amended returns can take 8-16 weeks to process. But yes, the IRS will issue the refund once it’s approved.
Amending your federal return might mean you need to amend your state return too. Each state has its own specified form for this, so check with your state’s tax agency.
Remember: The 1040-X becomes your new official return for that tax year – so accuracy and thoroughness are critical here. Which is what my team and I are here for. We’re glad to be a second set of eyes on your amended return, or take it off your plate completely:
