Updated for tax year 2025.
It happens. You filed your tax return on time, and you planned to forget about taxes for another year … but you just discovered a mistake on your federal tax return. What do you do? Do you file a new return with the Internal Revenue Service and tell them to forget about your original return? Do you amend your tax return to fix it? Do you owe a penalty for making a mistake?
Don’t worry. The IRS allows you to correct your return even if you make a massive mistake, like forgetting to enter your Form W-2 earnings. The IRS has seen it all before. In most cases, the IRS allows you to correct honest mistakes without issue; however, penalties may apply if additional tax is owed, especially if the error was significant or you commited fraud or tax evasion.
We will walk you through the four Ws (What, When, Why, Where) of amending a tax return and offer suggestions to prevent the need for an amendment.
Why file an amended tax return
You found an error on your original federal return. Did you enter your Social Security number incorrectly? Did you check the wrong box for your filing status? Did you simply make a typo when entering your Form W-2 wages? Did you forget to record a charitable contribution or other tax deduction?
Not all errors are created equally. Some errors are worthy of an amendment, while others are not.
Errors worthy of amendment include:
A substantial noncash contribution
Additional business deductions
Income, such as unemployment benefits, that you didn’t know you should report
A corrected form from your employer, financial institution, or a partnership
An incorrect Social Security number for yourself, your spouse, or a dependent
Other inconsequential errors are not worthy of amending a tax return. For small amounts that would not meaningfully change your tax liability (say, a small $20 charitable contribution or a handful of additional mileage for a business trip), it may not be worth the time and effort to file an amended return. Consider whether the correction would significantly affect your refund or tax owed before amending.
If you calculated your return by hand, didn’t use tax software, and made a math error, generally, the IRS will “find” these errors and make the corrections for you. The IRS will send you a letter informing you that they found an error and corrected it. You do not need to file an amended return if you agree with the corrections.
When to file an amended return
Don’t wait! File the amendment when you discover the error. You’ll have to complete a separate amendment for each year if you need to amend more than one year’s tax return. Filers don’t have forever to amend a tax return. You generally must file Form 1040-X within three years of the date you filed your original return or within two years of the date you paid the tax (whichever is later).
If you discover you missed a tax credit for several years, you generally can only amend returns for the prior three years to claim a tax refund. For example, you realized you qualified for the Earned Income Tax Credit (EITC) but didn’t take it. The EITC is a refundable tax credit. So even if you owed no taxes, you could file an amendment and claim a tax refund.
Some credits, such as the Child and Dependent Care Credit, are generally nonrefundable. That means they can reduce your tax to zero, but won’t generate a refund beyond the taxes you paid. If you had no tax liability, amending may not result in additional money back.
Note: If your amendment is to claim an additional tax refund, wait until you receive the original refund before filing the amended tax return.
What to file when amending your return
Repeat after us: Amend a tax return, don’t file a new return!
Filing an amended federal return may be easier than you think. You don’t have to start over. Instead of resubmitting your original return or filing a new one, you file Form 1040-X, Amended U.S Individual Income Tax Return, to change incorrect items.
And most importantly, only correct the forms that change. For example, if you are correcting your self-employment income on Schedule C, you typically only need to file Form 1040-X and the corrected Schedule C. You generally do not need to resubmit unchanged forms.
To file Form 1040-X using TaxAct®, sign into your account, open your return, and click Amend Federal Tax Return under the Filing tab as shown below.
Once you hit the amendment steps, follow the prompts, and revise your return as needed.
And before you finish, don’t forget your state return. Changing your federal income tax return could affect your state income tax return. You must amend both returns if you live in a state with income tax.
Where to file your amended return
If you filed Form 1040 or 1040-SR electronically and it was accepted by the IRS, you can e-file Form 1040-X. In fact, most amended returns for tax years 2019 and later can be e-filed using Form 1040-X, provided your original return was filed and accepted.
You can create and e-file an amended return with TaxAct using these instructions. If you mailed in your amended return instead of e-filing, you can track its status through the IRS Where’s My Amended Return? tool.
What if I owe money? Will I have to pay a penalty?
If it’s after the tax deadline, and you discover you underpaid your taxes, you may owe a penalty plus interest. Pay the tax due immediately to minimize interest and penalties.
However, if you have a good cause, such as erroneous information sent to you, be sure to attach a statement to your amended return and request an abatement of the penalty. The IRS often grants abatements when taxpayers attempt to correct problems on their own and as soon as possible. In fact, the IRS can be pretty reasonable and may grant penalty relief in certain situations, especially if you acted in good faith and corrected the issue promptly.
Note: Amending your tax return does not increase the risk of being audited.
How to avoid mistakes in the future
You can avoid most tax return mistakes by organizing your information before filing your taxes. It also helps to not wait until the last minute to start your return. Tax software handles the math for you and checks your return for errors, missing information, and potential tax savings.
It is also essential to read your tax return before you file it. Comparing it to last year’s return can help jog your memory about potential deductions and other items you should report.
Don’t hang on to your unfiled return too long just because you’re afraid it’s not perfect. It’s better to file your return on time than pay penalties for filing late, even if you have to amend it later.
This article is for informational purposes only and not legal or financial advice.
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