Filing taxes can be a stressful task, and sometimes you may realize that you made mistakes on previous tax returns. Fortunately, the IRS allows taxpayers to amend their tax returns if they’ve made errors or need to add information that was missed. However, many people wonder how far back they can amend their taxes. This article will provide a comprehensive guide to the topic.
What is a tax amendment?
Before we dive into how far back you can amend your taxes, let’s first understand what a tax amendment means. A tax amendment is simply the process of changing an already-filed tax return. The Internal Revenue Service (IRS) allows taxpayers to make changes to their federal income tax return by filing Form 1040X.
The reasons for amending a tax return vary from person to person; some may have missed claiming deductions or credits that could reduce their taxable income, while others may realize later that certain information, such as W-2, was not reported in actual time.
Whatever the reason may be, it’s important to note that filing an amended tax return does not always lead to additional refunds.
How far back can you amend taxes?
It’s important for taxpayers who want to amend prior year income-tax returns with Form 1040-Xs carefully check the deadline for each year being amended. Seeking professional advice before taking action is also recommended, as this often involves going through several previous years’ reports and documentation.
Generally speaking, there are three years from the original due date of your federal income tax return (April 15th), including extensions granted (but not beyond October 15th), during which you may file an amended return. For example:
- If you filed your 2020 Federal Income Tax Return on April 15th without any extension requested – then your statute of limitations would lead up-to April 15th, 2023.
- If you filed using one of two approved extensions (Form 4868 or Form 2350)– giving you extra six months – then your statute of limitations would lead up-to October 15th, 2023.
It is important to note that the IRS has specific limitations for tax refunds applied to taxes beyond three years. When a refund claim exceeds the limit, taxpayers must discuss their options with an experienced tax professional.
Keep in mind that there are different rules and regulations for amending state tax returns, as each state can fix its own deadline separately from federal deadlines.
How To Amend a Tax Return?
Once you’ve determined how far back your taxes can be amended, it’s time to start the process. Here’s what you need to do:
- Gather all necessary documents: Collect any documents related to your original return and any changes that need to be made.
- Fill out Form 1040X: The form asks for basic information such as name and Social Security number, along with details about income, deductions or credits being added or removed.
- Provide an explanation: Explain why the change is being made clearly on page two of Form 1040X.
- Attach supporting documents: If additional documentation is required by the IRS include them along with do not forget attachments such as W-2 forms that may balance over-payment/underpayment when compared against prior filing.
- Mail in your amended return: Once everything is filled out correctly don’t forget postage & mail ASAP!
Note – Whilst electronic filings are available; Paper filing remains mandatory for individuals going through amendments unless recommended otherwise by professionals.
In summary, taxpayers have three years from the original due date of their federal income tax return (April 15th), including extensions granted (but not beyond October 15th), during which they may file an amendment using Form 1040-X. State deadlines will likely vary so it’s important to check statute information based on your unique location.
If you realize that there is an error or omission in your tax return beyond the time limit, consulting with a licensed tax professional who can best guide on how to proceed would be wise.
Q: How many years can you go back to amend taxes? A: In general, you can usually go back up to three years from the original tax-filing deadline to file an amended return and claim a refund.
Q: What happens if I discover a mistake on a tax return from more than three years ago? A: If you discover an error or omission in your tax paperwork from more than three years ago and it results in additional taxes owed or reduced refunds, you may not be eligible to correct the mistake and file an amended return. However, if the IRS discovers the error during an audit or investigation of your account, they may adjust it without penalty.
Q: Can I still amend my taxes even if I owe money to the IRS? A: Yes! You can always file Form 1040X (Amended U.S. Individual Income Tax Return) even if you owe money to the IRS for prior-years’ returns that were filed late or not paid when due. Keep in mind that any outstanding balances will accrue interest and possible penalties until fully settled, so it’s best to pay what is owed as soon as possible.