Amended Returns (October 2017)

Tax Tips

Amended Returns

By Michael Aston, E.A.
Alhambra Tax Center


An amended return, also known as 1040X or 540X for California, is to make changes on the original filed tax return or another amended return.

When filing a 1040X or 540X, that now becomes the new tax return, changing the prior tax return to include new information.

Below are some or the reason somebody may want to amend their tax return:

·       Correcting income, deductions, credits, or other items incorrectly reported on the original return.

·       Changing the taxpayer’s filing status. Please note, change from married filing joint to married filing separately after the due date is not allowed.

·       Changing amounts previously adjusted by the IRS or State.

·       Filing for a refund based on an NOL or unused credit.

If filing an amended return results in a refund, there is usually a time limit to file. This time limit for the IRS is 3 years from the filing deadline or 2 years from when you paid, whichever is later. The time limit for the State of California is 1 year longer. Currently, assuming the original tax return was filed and paid on time, you can amend your 2014, 2015 and 2016 federal tax return. As for the State of California an amended return for a refund are the same years plus 2013. The federal 2016 tax return can be amended until April 15, 2020 and the State of California until April 15, 2021.

It was mentioned 2 years from when you paid or 3 years form the filing deadline. How the 2-year deadline works, let’s assume that you filed your 2016 tax return on time and owe $1000 and you do not pay the $1000 until January 2019, you will have until January 2021 to amend that return. This can get a little confusing when somebody is making monthly payments. There is a chance that you may have multiple deadline dates based on your payments.

There are special situations in which you may file beyond the 3-years deadline.

·       Carried over a net operating loss (NOL).

·       Carried back a credit resulting from a NOL carryback.

·       Worthless security (7 years).

·       Nonbusiness bad debt (7 years).

·       Claim or change a foreign tax credit (10 Years).

·       Claim a deduction for foreign taxes (10years).

Currently amended must be mailed in, e-filing is not an option. The IRS states that it will take 12 to 16 weeks to process an amended return once it is received.

For more information about amended returns please go to or speak to a tax professional.