As a US citizen living abroad, tax compliance can be tricky. Mistakes happen. Fortunately, the IRS allows tax filers to correct errors or update information by amending their tax return. In this article, we’ll discuss everything you need to know about filing an amended tax return.
What is an Amended Tax Return?
An amended tax return is a corrected version of a previously filed tax return. It’s filed using Form 1040-X. This form allows you to update errors and adjust income that was incorrectly reported.
When Should You Amend Your Tax Return?
You should amend your tax return when you discover mistakes or omissions that impact the accuracy of your filing. Examples include:
- Reporting additional income or correcting previously misreported income.
- Claiming deductions or credits you initially overlooked, such as the Foreign Earned Income Exclusion (FEIE) or Foreign Tax Credit (FTC).
- Fixing filing statuses, such as changing from “single” to “married filing jointly.”
- Expat-Specific Exclusions: Adjusting FEIE claims or adding new exclusions like the housing deduction.
How Long Do You Have to Amend a Tax Return?
Tax filers generally have three years from the original filing deadline to amend their tax return. For example, if a person filed their 2022 return by the April 2023 deadline, they have until April 2026 to submit amendments. Alternatively, filers can amend within two years of paying any owed taxes.
You can still amend older returns. However, this is only to correct significant issues. This includes, but is not limited to, unreported income or compliance with international reporting laws. Refunds cannot be claimed for amendments past the three-year deadline.
How Do You Amend a Federal Tax Return?
Depending on your situation, the process for amending your tax return can be straightforward:
Make sure you have access to the original return: It is suggested that you print the return and have it beside you for the following steps.
- Complete Form 1040-X: This can be completed in several different ways. You can hire a tax professional, use your own software or download the form from the IRS website. Include the corrected information and provide explanations for the changes.
- Attach Supporting Documents: If claiming new deductions or credits, attach relevant forms. This may include an additional W-2 or 1099.
- Submit the Form: You can now submit Form 1040-X electronically via professional tax software. Paper filing is the only option if you amend your return by yourself.
- When you amend your federal return, you may also need to amend your state return. Each state has different laws surrounding tax amending.
What Happens After you File an Amended Return?
Once the IRS receives your amended return, they will review it to ensure your changes are valid. Processing typically takes 16 weeks or longer. This is especially true for expats due to the complexities of international filings. During this period, you can check the status of your amended return using the “Where’s My Amended Return?” tool on the IRS website.
Navigate Your Personal Tax Situation with BNC Tax & Accounting
Correcting your return can be difficult but we are here to help. BNC specializes in tax preparation and planning for U.S. citizens living abroad. This includes how foreign income, businesses or rental properties affect your federal and state. tax liability. We also advise clients how to use tax benefits to their advantage.
If you have questions or concerns about your taxes, book your free 15 minute call here. You will have the opportunity to speak with a fellow expat who can guide you towards tax compliance.
