How to amend a tax return in 2025: Our expert guide

If you asked the average person, you'd likely be hard-pressed to find someone who enjoys filing tax returns. When it comes to filing an amended tax return, that number shrinks even more. Even so, nearly 13,000,000 mistakes were made on tax filings in 2022 alone, so amendments are as necessary as ever.
That said, amending a tax return should never be delayed out of fear or stress—especially when the process of doing so is so simple.

Reasons you'd need to amend your taxes

There are several reasons you may need to amend your return, from forgotten income to simple clerical errors. Regardless of what your reason may be, it's important to understand all of the reasons to ensure your return is as accurate as possible.

Forgetting to report all sources of income

In some cases, individuals may simply forget to include all income sources when filing an initial return, such as a freelance gig or a side hustle.

Inaccurate or missing 1099 forms

If you do not receive all of your 1099 forms for jobs done throughout the year (or receive incorrect forms), you may need to file an amended return.

Human error

Whether they come in the form of simple typos, an incorrect W-2 from your employer, or confusion surrounding brokerage statements, errors are a persistent cause for amended tax returns.

Double reporting

Sometimes, individuals or tax preparers may mistakenly include the same income source multiple times on different pages of your federal return. This issue may also arise if your employer or a financial institution reports an income source you also report on your individual income tax return.

Changes in business income

Common among small businesses and large companies alike, discovering unreported expenses or income streams after you've already filed your return may necessitate an amended tax return filing to account for additional tax owed.

Scholarships or grants

Tax liability concerning scholarships and grants can be complicated for even the most financially savvy among us, and many amended returns come from students who have made simple mistakes. Scholarship money used for tuition, for example, typically isn't taxable, whereas that same money used for living expenses may be.

Misclassifying income

Beyond forgetting to report certain income sources, some individuals may misclassify income sources, such as reporting taxable income as nontaxable or vice versa. This can make your return differ from what the Internal Revenue Service expects based on reporting from your employer or financial institutions, potentially triggering an audit or other problems.

Rollovers and distributions from retirement accounts

Typically, rolling over money from one retirement fund to another can be done tax-free, but it's important to pay careful attention to avoid unintended issues when filing a return. Conversely, many retirement fund distributions are taxable unless they qualify for certain exemptions.

Our four-step guide for amending your return

Figuring out how to amend a tax return may seem like a daunting task, but it essentially comes down to four steps.

1. Clarify why you need to amend your return

Using the list above, identify which reasons apply to your circumstances. That way, you can be sure of everything you'll need to do to fully update and correct your return. If working with a tax professional to file an amended return, they can help you decide which reasons apply.

2. Gather the appropriate documents and information

Documents from your original return

First and foremost, you'll need to collect any and all documents you used to create the original return. If you used a tax service, these will be with the tax professional who handled your return. Otherwise, check your own records for the appropriate paperwork before moving on.

Documents for income adjustment

Income adjustments are some of the most common reasons that people amend their federal tax return and typically require you to include a W-2, 1099 form, or any other document that states income gained throughout the year.

Documents for deductions or credit adjustments

For those looking to amend credits and deductions in order to maximize their return, make sure to gather all relevant receipts for charitable donations, mortgage interest statements (which will be IRS Form 1098), receipts for eligible education-related bills, medical expenses, and any state and local taxes paid.

Documents for filing status or dependent adjustments

If changing your filing status or adding dependents, collect necessary documents, such as the Social Security number for your new dependent and official documentation of changes to your marital status.

Situation-specific documents

If your amended return would affect any tax schedules or forms, such as Schedule A for itemized deductions or Schedule D for capital gains and losses, make sure to gather them ahead of time.
Similarly, other documents that don't fit neatly into the above category, such as records of adoption expenses, losses from theft, foreign income, or income gained from using your home as a business, should be kept on hand for the amendment.

3. Obtain and complete Form 1040-X or Form 1120-X

In order to file an amended tax return, the form you need changes depending on whether you’re filing as an individual or as a corporation. For individual tax returns, you'll need to complete and submit Form 1040-X, which can be found and downloaded through the IRS website. For corporate returns, you’ll need to complete and submit Form 1120-X, which can be found in the same place.

Regardless of whether you’re filing as an individual or as a company, you'll want to include all of the information you provided with your original return but also make use of the section on the back of the form to clearly and concisely explain why an amendment is needed. If you need to amend your return for more than one of the reasons listed above, make sure to explain each reason independently.

Once everything is complete, double-check to make sure the amendment is accurate. While it's possible to amend a return more than once, it's best to avoid that scenario.

4. Submit and track your amended return

According to current policies, many tax return amendments need to be physically mailed so they can be filed in paper form. Since 2020, however, the IRS has begun to allow taxpayers to electronically file Form 1040-X for certain tax years, so check whether this option is available to you.

Regardless, make sure to include your completed 1040-X as well as any additional documents that may be necessary, such as forms or schedules. Then, you'll receive an "amended return" status indicating that corrections are being processed.

Generally, amendments will take up to sixteen weeks to process (or even longer during peak season), but you can use the IRS website's "Where's my amended return" function to track your return's progress.

How long can you wait before amending a tax return?

Generally speaking, the IRS allows taxpayers to file an amendment up to three years from the date the original return was filed or two years from the date it was paid (whichever is later).

That said, you should always file an amendment as soon as possible in order to avoid extra interest or fees, which can continue to accrue while you wait to file for prior tax years. In situations where an amendment would grant you extra money from a larger return, you'll typically forfeit that money unless you file an amendment within this window.

Keep in mind, however, that the IRS often changes policies concerning returns, so always consult a tax expert and stay up-to-date on the latest policies. Additionally, state tax returns may differ from federal returns, so research local rules before filing your state taxes.

What happens if you don't amend an incorrect tax return?

If you fail to amend an incorrect or incomplete tax return, you risk facing several consequences. However, these consequences vary depending on whether the mistake was in your favor or the IRS, whether it involves underreporting incomes, overstating deductions, or similar considerations. It's always best to file an amended return where necessary.

Examples of consequences for failing to file are:

1. Audit or inquiry: The IRS may detect discrepancies between income reported by your employers or financial institutions and the income you reported in your tax return. When this happens, those discrepancies can potentially trigger an audit or an official inquiry asking for clarification.
2. Owed taxes, interest, and penalties: If the mistakes on your tax return led to underreported income and owed taxes, the IRS may calculate the additional tax owed, add interest from the due date of the payment, and even include penalties for failure to pay. All told, this can cause a much larger bill than if you had paid correctly to begin with.
3. Losing your refund: If the mistakes on your return were in your favor, such as paying more tax than necessary, failing to amend your return may cause you to lose out on any available refunds.
4. Statute of limitations: The standard statute of limitations for the IRS to audit a tax return is three years from the date of filing or the due date, whichever is later. This extends to six years for cases of significant underreporting of income (more than 25% of the gross income on your original return).
5. Criminal charges (rare): Though exceedingly rare in more common cases, deliberate attempts to evade taxes may prompt the IRS to pursue criminal charges.

Frequently asked questions

Do you need to file an amended return for any mistake?

For extremely minor math or clerical errors, the IRS commonly fixes mistakes itself. In these circumstances, the IRS will either send you a bill for any additional tax owed or a secondary refund for overpayment.

How will I receive an extra refund?

Although the IRS defaulted to paper payments in years past, it has begun offering electronic refunds deposited directly into your account. This option requires you to submit your banking information through the IRS website, however, so make sure you've done so if you'd prefer electronic payments.

Should you update withholding for future years if you amend your return?

This depends on whether the reason for your incorrect return is likely to continue. If, for example, there was a change to your investment income or you have a side hustle you intend to continue, you may want to adjust withholding to ensure you pay enough taxes. If, instead, the mistake in your return was a one-time issue, you may not need to adjust future taxes at all.