When should you file an amended return?

Generally, you must file an amended return within three years from the original filing deadline, or within two years of paying the tax due for that year, whichever is later. After you file your original return, you can determine that you made a mistake or omitted something from your return. While the IRS often finds and corrects errors during processing, there are certain situations where you may need to file an amended return to correct an error or make other changes to your return. You won't get a refund for these types of changes, but you'll still need to file an amended tax return to avoid additional penalties and interest.

Fortunately, whether the error is in your favor or, on the not-so-positive side, in favor of the government, filing an amended tax return may be the next best step. The IRS reports that you generally must file Form 1040X to modify a return within three years of the date you filed your original tax return, or within two years of the date you paid the tax, whichever is later. If the new information affects the deductions or credits you requested in your original return, for example, if you increase your income to a point where the tax break decreases or is no longer available, you'll also need to file an amended return to do so. If that's the case, it might make sense to modify your federal return and pay a little more in federal taxes so you can take advantage of a larger state tax break.

If you were due a refund on your original return, wait until you actually receive the refund before filing an amended return for that tax year. Also, if you forgot to attach a particular form or schedule to your tax return, you don't need to file an amended return to address it. If you are the victim of a hurricane, wildfire, or other natural disaster, you may be able to file an amended return to claim a deduction for incidental losses for the tax year before the disaster. If you file a paper return, check the box at the top of the form to indicate the tax year of the return being amended.

If you owe money to the government as a result of filing an amended return, pay the tax immediately to avoid additional interest and penalties to the IRS. So, if you've already filed your state return, check to see if filing an amended federal return means you'll also have to file an amended state return. Maybe you discover an error right after you file your tax return, or it may be months or even years before you realize that a new innovation changed the amount of taxes you should have paid on a previous return. If you owe more in taxes and don't change your return, the IRS will likely send you a CP2000 notification, which could result in significant fines.

There are several special deadline rules for amended returns based on changes related to bad debts, foreign tax credits, net operating losses, natural disasters, service or injuries in a combat zone and, for some other situations, see the instructions (opens in a new tab) of Form 1040-X for more information. Tax return for seniors, Form 1040-EZ, Income Tax Return for Individual and Joint Filers Without Dependents, Form 1040-NR, U.