U.S. Corporations and Individuals Amended Tax Return Introduction
The IRS requires corporations and individuals to file annual tax returns with the correct information. When a corporation or individual discovers an error in a tax return filed, an amended tax return could be filed to correct the previous error information. This article will briefly describe under what circumstances corporations and individuals should consider amending their tax returns; the time limit for corporations and individuals to amend their tax returns, and an introduction to the functions and contents of the Form 1120X and Form 1040-X.
For a corporation, amendments to a tax return should be considered when the following three situations arise:
- The information in the tax return previously filed by the corporation is incorrect, and the incorrect information needs to be corrected; for example, the number of income and deductions is wrong or omitted.
- The corporation claims for a refund request with the IRS.
- After the prescribed deadline, the corporation still wants to make certain elections, such as changing the accounting method and accounting period, etc.
Corporations are required to use Form 1120X to amend a previously filed tax return. Form 1120X mainly includes the following information:
- The corporation’s name, address, federal EIN, telephone number, and where previous tax returns were filed.
- First, amend the original tax return to show any changes in income, deductions, credits, and taxes. Then, fill in the amount of income, deductions, credits, and taxes before amended on Form 1120X. Form 1120X will automatically calculate the correct number after amendment.
- On Form 1120X，the corporation shall describe in words the specific changes in the income, deductions, credits, and taxes mentioned in point 2 above. Also attach appropriate supporting documents or forms, if applicable.
For a corporation, the amended tax return filing time limit is as follows:
- The filing time of the amended tax return can only be after the original tax return has been filed.
- The amended tax return must be filed within three years of the original tax return. When a corporation wants to file a refund claim with the IRS, it must file an amended tax return within two years of paying its taxes.
For an individual, amendments to a tax return should be considered when the following four circumstances arise:
- Correct the erroneous information on the previous individual tax return. Individual tax returns include 1040, 1040-A, 1040-EZ, 1040-NR, 1040-NR EZ. Error information includes incorrect adjusted gross income amounts, tax ability changes, etc.
- The individual claim for a carryback with IRS due to a loss or unused credit.
- Change the amount previously adjusted by the IRS, but without adjustment or including any interest and penalties.
- After the prescribed deadline, the individual still wants to make certain elections; for instance, changing the accounting method and accounting period, etc.
Individuals are required to use Form 1040-X to amend a previously filed tax return. Form 1040-X mainly includes the following information:
- Check some specific reasons for filing Form 1040-X, if applicable.
- Individual names, social security numbers, home addresses, phone numbers, changes in individual filing status, changes in the number of dependants, etc.
- First, amend the original tax return to show any changes in adjusted gross income, deductions, credits, and taxes. Then, enter the amount of adjusted gross income, deductions, credits, and taxes before amended on Form 1040-X. Form 1040-X will automatically calculate the correct number after amendment.
- On Form 1040-X, individuals need to describe in words the specific changes in adjusted gross income, deductions, credits, and taxes mentioned in point 3 above. Also attach appropriate supporting documents or forms, if applicable.
For individuals, amended tax return filing time limits are as follows:
- The filing time of the amended tax return can only be after the original tax return has been filed. An individual may, in principle, file more than one amended tax return if each amended tax return is filed in a timely manner.
- When an individual wants to file a refund claim or credit claim with the IRS, file an amended tax return within three years of filing the original tax return, or within two years after the individual has paid the tax, including extension.
- For those individuals who are mentally or physically unable to manage their own finances, the time to claim for a refund or credit may not be limited by the time limit for point 2 above.
Reference:
https://www.irs.gov/pub/irs-pdf/f1120x.pdf
https://www.irs.gov/pub/irs-pdf/f1040x.pdf
https://www.irs.gov/instructions/i1040x |
