How to amend a tax return

You did it! Your taxes are finally in the books for another year. And then it happens. You get a statement from your (apparently forgotten) investment account. Or you hear from a neighbor that your son’s Lasik eye surgery may be tax-deductible as a medical expense. Now what!? Don’t panic or worry an IRS agent will show up to imprison your first-born child. We have assembled step-by-step instructions for you to follow.

1. Errors are inevitable. You are allowed to file an amended tax return.  You are allowed to amend, or fix, your tax return for any left out income (to avoid fees and interest, definitely amend for left out income), change your filing status (single, head of household, married), or include deductions or credits you forgot. Do not amend for simple math errors.

2. Download and print the form 1040X and it’s instructions. It cannot be efiled and will have to be filled in and sent via snail mail. It’s a generic form and you will be able to mark what year it is for. Note: you may only amend returns up to three years old. So your 2001 taxes are definitely out.

3. The 1040X is essentially set up the same way as the regular 1040, except there are 3 columns: A for what you originally filed, B for the total up or down of the number, C for the correct (fixed) number. Fill in this form with the help of the instructions (if you can bear it).

4. When putting together your papers to mail in, include any affected and fixed schedules and forms. For example if you forgot to include your real estate property taxes in your itemized deductions, include the Schedule A.  Or if you get a late W-2, that should be included too.

5. Put all the forms in an envelope and mail it off! Send it to your particular IRS processing center (to see which this is, check page 5 of the 1040X instructions). If you are amending several years, put each in its own envelope. And remember to check and see if your amendment affects your state taxes. (I cannot help you here as states all have their own policies and forms!)

6. If your amended tax return results in you owing more money, send in a check or money order, or see for electronic payment options. If it results in a refund, you will get a refund check in the mail. And we all know you can’t wait to go deposit it responsibly into your IRA account.

Now you can relax. It was easy!