How to Prepare an Amended Return
Amending your tax return is a two-part process. Part one: fill out a new Form 1040. Part two: report the differences between your original tax return and your new tax return on Form 1040X.Part One: Preparing a new 1040. As we will discuss below, the IRS scrutinizes amended tax returns a little more carefully. That means you need to exercise extra vigilance to make sure your new 1040 is as complete as humanly possible. It does not matter if you filed your original tax return using 1040EZ or 1040A forms. You will need to fill out a full 1040 for the amended return, because you will need to match up line items from your new Form 1040 to the various lines on Form 1040X.
Also, attach all necessary schedules, forms, and documentation to your new 1040.
Part Two: Preparing Form 1040X. Before starting in on the Form 1040X, you need to have in front of you: your original tax return and your new Form 1040. Put these returns side by side. Now get out a Form 1040X. You will notice three columns. Column A reports various items from your original tax return. Column C reports the same items from your revised 1040. Column B reports the difference between the old and the new numbers. If the difference is an increase, the number will be positive. If the difference is a decrease, there will be a negative number in Column B. Column A plus Column B should add up to the amount in Column C.
The most important part of the entire Form 1040X is Part II, on page two of the form. Part II is the area where you report what changes you made to your 1040, and the reasons for these changes. You need to be clear and concise in your explanations. I have seen the IRS return amended returns because there was an insufficient explanation in Part II. For example, let's say you forgot to include wages from a W-2. The Part II explanations might read as follows:
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"We are reporting additional wages (1040 line 7) and additional withholding (1040 line 63) from a W-2 we forgot to include on our previous tax return. This resulted in changes to our adjusted gross income (line 37), taxable income (line 42), total tax (line 62), and refund (line 71). Enclosed is a new 1040, as corrected, with a copy of the W-2 attached."
Being clear and concise means that you are telling the IRS exactly what changed and why those changes are being made.
Some extra things to watch out for when preparing your Form 1040X.
Write the tax year you are amending at the top of Form 1040X. Form 1040X is a generic form and can be used for any tax year. Put the tax year next to the words reading "This return is for calendar year."Check the numbers and your math. Check it twice.
Check the refund or amount you owe calculations on lines 19 through 24. If you received a bigger refund on your original tax return than you should have, you will need to pay back some of your refund. If your original refund was smaller than you could have received, you will get an additional refund by filing an amended return.
Sign and date the amended return.
