Starting a company

Understanding Form 1040X: A Practical Approach to Correcting Your Tax Filing

Key Takeaways

  • Get to know the purpose of the 1040X form
  • Understand the benefits brought about by 1040X form
  • Learn the eligibility criteria for filing the 1040X form
  • Understand the procedures included while filing the 1040X form
  • Learn the mandatory documents are required while filling 1040X form
  • Get to know some tips for startup ventures while filling out a 1040X form

What is form 1040x?

It is natural for any taxpayer to make a mistake while filling out tax forms, even after being so careful. However, minor mathematical errors are rectified by the IRS (Internal Revenue Service) Department. Well, 1040X forms give you provision for amending any tax returns for reasons like that you found some changes in return, deductions, or credits after some time (however, there is a period when you could request a refund using the 1040X form). 1040X Tax forms contain a detailed list of each adjustment you wish to make using the tax amendment of 1040X.

The importance or benefits of filing

Even though the task of 1040X forms looks like a hurdle, certain benefits come along with the same. From giving you provisions to claim additional tax credits, taking other deductions, and receiving a bigger refund, foolproof filling and submission of 1040X forms for authentic reasons comes with benefits for the taxpayer. However, it is essential to thoroughly examine the terms and conditions and lookalike clauses before filling and cross-checking the supportive documents to ensure everything runs smoothly.

Any repercussions of not filing the form

Failing to fill 1040x form leads to a penalty which is, in most cases, 0.5% to 1% of the unpaid amount, which gets due every month concerning 21 calendar days from the date of the notice (demand for payment).

Additionally, 1040x forms are generated in favor of people to help you get refunds concerning tax filing in a systematic procedure. However, making faults in the same can cause hefty values. The penalty can rise to as huge as 25% interest on the amount.

Further, filing a 1040x form saves you from the following problematic conditions:

  • Penalties imposed for negligence
  • Substantial understatement of income tax
  • Reportable transaction understatements.

Who needs to file form 1040x?

Any taxpayer could file the tax amendment form of 1040x form if their original tax form were drafted using IRS form 1040 or 1040SR in close-knit with the Internal Revenue System (IRS).

Also, if any corrections have to be made in 1040, 1040-SR, or 1040-NR forms, most taxpayers are expected and found to be using one of these three forms to submit their annual tax returns.

The types of business structures, income types, and income range or threshold for eligibility

It is mandatory to file a 1040x form for anyone who has already filed a tax return and requires an amendment due to any of the below-mentioned reasons:

  • To make corrections/rectifications in the forms 1040, 1040-SR, or 1040-NR. (As the majority of taxpayers utilize one of these three forms to submit their annual tax returns)
  • To incorporate an election for the entity after the deadline 
  • To make changes in the amount that the IRS previously calibrated
  • To appeal for a claim for a return-back due to a loss or an unused credit

Furthermore, you are eligible to file your IL-1040-X via MyTax Illinois if:

  • You have filed Form IL-1040 by electronic means electronically for the tax year you wish to make the amendment.
  • You have created a MyTax Illinois account (If yes, you may use the links in the right-hand column to either create or use your MyTax Illinois account)

How does one file form 1040x?

To make amendments in Form 1040 and 1040-SR, 1040x can be filed electronically and on paper.

To file electronically:

Electronically fill and mail all the details with every other tax document under the designation "amendment." All these procedures can be done through the IRS portal.

To file on paper:

With the word "Amended" at the top of the application, attach the federal 1040X. On filing, attach the additional amended supplementary federal or Iowa forms too. If you have to amend an IA 1040 form, attaching the IA 102 Amended Return Schedule is required.

The step-by-step process of filing the form

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Step 1: Log in to your account in the IRS portal

Step 2: Collect all your tax documents and assemble them for easy access

Step 3: Kindly fill out an Amended Tax Return by clicking the Amend Tax Return link on the side menu. For increased clarity of the procedure, the website will take you through the rest of the process step by step.

Step 4: Electronically File or Mail Your Tax Return

(It is possible to e-file your amended return if you have e-filed your original return during the same calendar year.)

Please note:

You will not be able to e-file and are expected to mail your amended return if:

  • You have filed your original return on paper
  • You have already electronically filed three amended returns previously this year
  • You have filed or mailed in a prior-year tax return during the current filing season
  • The Internal Revenue Service Department doesn't have a record of your original return

Form 1040x instructions

When you fill out the 1040x form, check out for the following factors(as they are the most common things a taxpayer might tend to miss out on in the first draft):

  • Deductions
  • Credits
  • Exemptions
  • Income
  • Withholding
  • Also, repeatedly carry out a thorough check of the original accounts

Below mentioned are some of the commonly required mandatory documents for filing 1040x 

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(Note: Depending on the type of business entity, specific requirements are subject to change)

  • A copy of your original IL-1040 (inclusive of any departmental amendments for the tax year you want to change)
  • A copy of your U.S. 1040X or U.S. 1045;
  • Proof of federal finalization for your U.S. 1040X or U.S. 1045
  • A copy of any refund check and other emails you received from the IRS stating the acceptance of the changes shown on your U.S. 1040X or U.S. 1045
  • An account transcript from the IRS or examiner's report.
  • A copy of the federal refund deposit slip
  • Previously unsubmitted W-2 or 1099 forms, if any
  • Any substantiating forms, schedules, or documentation supporting the amended return

Filing deadlines

For your 1040X form to be fruitful and serve the purpose, the following dates must be kept in mind, and requirements must be met to obtain the actual-recorded refund.

Usual Case:

You must file the 1040x form within three years of your original return. Within 2 years from the date of payment of tax.

When you have received an extension date for filing your tax:

Three years by taking the actual date after the extension period into consideration. The said tax payment deadline if you filed your return after the expiry of the extension period

For Business Owners:

With the help of NOL- which is referred to as a net operating loss card/scheme, business owners get access to file an amended tax return for a year within a year's time frame.

While paying for bad debts:

If an amended tax return 1040x is filed due to worthless security and money-loss debt, then the department of IRS facilitates an additional time frame of 7 years to amend the tax return. Seven years refer to 7 years from the original due date of the tax payment.

1040x tax form tips for startup

  • Use form IA 1040X
  • Kindly enter the year of the return you are amending for at the top of Form IA 1040X.
  • If you find IA 1040X inaccessible, you can send an IA 1040 for the year you are correcting with the edits made.
  • Write "AMENDED" on the top of the IA1040 along with an IA 102 Amended Return Schedule.
  • The amended Iowa return can be filed electronically as well.
  • Make sure to file on a different day than the original return.
  • Make sure to provide a detailed explanation for filing the amended return. Don't include any schedules or forms that verify the reason for the changes.
  • In case if you are filing a corrected tax return and it concludes in an increased or reduced credit carry forward, make sure to include this in your explanation too.
  • Add tax forms, such as W-2s or schedules, while filing amends.
  • Keep a note to file an amended return within the span of three years from the original deadline of the tax return to receive a refund.
  • In case of amending more than one tax return, draft an amended return for each year and mail them in separate envelopes.
  • Remember to put your signature on the amended return.


104x forms facilitate the provision for amending any tax returns, and failing to fill 1040x forms leads to a penalty of 0.5% to 1% in most cases. Ignoring the same over a long period can lead to a penalty of over 25% interest every month if not done on time.

Any taxpayer could file the tax amendment form of 1040x form if their original tax form were drafted using IRS form 1040 or 1040SR in close-knit with the Internal Revenue System (IRS). 1040x can be filed both electronically and on paper (please note to write as "amended" on top). Furthermore, it is required to file the 1040x form within three years of your original returns and tax payment. Also, keep all your tax forms and other documents handy for ease of use and remember to add tax forms, such as W-2s or schedules, while filing amends.

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