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When you file your expat income taxes, it is simple to make any error. The Internal revenue service helps expats to amend their income tax returns to correct any mistakes. Here is something that you must be aware of about Amending your U.S. Expat income tax return.
Key Takeaways
- You don’t have to file an amended income tax return when it comes to calculation mistakes
- Amending an income tax return might assist you in increasing your refund or decreasing your income tax bill
- Expats may amend a previously claimed additional income tax credit or file an expat income tax return to fix any issues.
What Is an Amended Tax Return?
An amended income tax return is a method to make any changes to a previously filed income tax return. Taxpayers have to file an amended income tax return for different reasons, such as reporting additional income, correcting any errors, or claiming missed credits or deductions.
Form 1040X needs taxpayers to give details about their original return, the reasons for the changes, and the changes that they are making. To file an amended income tax return, taxpayers should complete and submit form 1040X, which is the Amended U.S. income tax return. It is necessary to note that income taxpayers may only file an amended income tax return for a previous taxable year within a specific timeframe. Income taxpayers within two years from the date they pay the tax or up to three years from the original date of the income tax return, whichever is later, to file an amended income tax return.
If the changes are approved, the Internal Revenue Service may send a bill or issue a refund for any additional taxes owed. The IRS may evaluate the amended income tax return once submitted and either deny or approve the changes.
It is vital for income taxpayers to carefully check their original income tax return and the amended return before submitting it to eliminate any problems and check accuracy. Let us discuss some of the examples:
Example #1: Correcting an Error
Jazz expat moved to Mexico in 2022. Jazz works as a nurse in a Mexican hospital and also gets income from rental assets in the United States. She filed an expat income tax return in 2023. Also, she has reported her rental income from the U.S., as she is not aware that she has to report her foreign income too. After finding this error, Jazz filed an amended income tax return for 2022 that also included a nurse in her reported income. It may shield her from the charges she may face for failing to report her income across the globe.
Example #2: Claiming a Tax Benefit
Max shifted abroad to the U.K. in 2021. Max filed his first expat income tax return in 2022 and paid the associated income taxes. After consultation with an ex-pat income tax professional in 2023, he learned that he might have claimed the FTC for 2021 (Foreign tax credit), which might have decreased his U.S. income tax bill to zero.
Max has not missed his opportunity to optimize his income taxes. With the assistance of his accountant, he may file an amended income tax return and claim the FTC or Foreign tax credit retroactively. Once the Internal Revenue processes his amended income tax return, they might send him a refund for the income taxes he has paid already. Max breathes a sigh of relief now!
When to Amend Your Expat Income Tax Return
The common factor in amending an income tax return is to correct an error. You might have to file an amended income tax return to claim any deductions or credits you might have missed when filing for the first time. Other common areas to amend an income tax return that includes:
- Removing or adding an income tax amount
- Changing your status of filing
- Eliminating or adding a dependent
- Claiming a carryback for an unused or lost credit
Regardless of your reason to amend an income tax return, you should wait until the Internal Revenue has processed your original income tax return. In this manner, the Internal Revenue Service might have to get your original income tax return and your amended income tax return mixed up. You may check the status of your original income tax return by visiting the IRS site.
Situations When Amending Your Income Tax Return Isn’t Needed
While amending an income tax return might be useful, there are times when it is not vital. For instance, if you made an easy mathematical mistake when calculating income taxes, you don’t have to file an amended income tax return. The Internal Revenue Service may rectify that mistake and notify you of any changes to refund or your income tax bill.
You also have to file an amended income tax return if you forget to include a form such as a schedule or W-2. If the Internal Revenue Service needs a copy of these W-2 or schedule form, they may contact you to request it. You can file an amended income tax return prematurely, which may complicate the scenario unnecessarily.
Other times when you don’t have to file an amended income tax return include:
- After getting a CP2000 notice from the Internal Revenue Service
- After getting an audit notice from the Internal Revenue Service
- After getting a notification that the Internal Revenue Service has rejected your filed income tax return electronically.
Deadline To File an Amended Income Tax Return
There is a probability for you to file an amended income tax return at any point after filing the original return. Also, to claim an income tax credit or get a refund, you should amend an income tax return within whichever of these timelines is later:
- Two years after paying any income tax that you owed on your original tax return
- Three years after you file your original income tax return.
If you have filed your original return already before the due date, the three-year deadline might begin on the due date rather than the day you filed. For instance, if the income tax return was due on 18 April, but you filed on 1 February, you might have three years from 18 April to refund or claim any credit through an amended income tax return.
If you request an extension, on the other hand, the deadline might be extended to three years from the date you filed your IT return, regardless of the due date.
For instance, if you have requested an extension until 17 October and you filed your return on 1 August, the deadline for claiming a refund or a credit might be three years from 1 August.
Pro Tip
If you claim any additional refund, then you must wait until you get your original refund amount before filing an amended income tax return. You may cash the check before you get your additional refund check.
How to Amend Your Income Tax Return
You can collect the correct paperwork.
When you prepare to amend your income tax return, the first step is to collect all the papers that are needed for you to amend your income tax return. To begin with, you have to use IRS or Internal Revenue Service Form 1040-X to amend your income tax return. You must submit some additional forms. If you claim a deduction or any credit, you must collect all the papers that support your claim. Adjusting the employment income reported on your income tax return, you might require an amended or new Form W-2.
You also require a copy of the income tax forms that you are amending. It includes your Form 1040 income tax return form and any other schedules or forms that are involved. For instance, if you adjust any of your capital losses or gains, you might need copies of Form 8949 and Schedule D.
Claim Any Credits or Deductions That Are Available
The purpose of the amendment of your income tax return does not matter. It is always wise to check the possibility of decreasing your taxable bill. The Internal Revenue Service offers many tax advantages for Americans staying overseas, such as the following:
- FHD or Foreign Housing Deduction
- Foreign Earned Income Exclusion
- FTC or Foreign Tax Credit
Using these advantages, many expats may erase their U.S. income tax bill altogether. You may double-check your options when you amend your income tax return. An expat tax consultant may recommend the smartest decisions for your situation.
Fill Out Form 1040-X
The next level is to fill out the 1040-X form. This 1040 Form is comparatively simple, and the instructions are simple to know. You have to enter the adjustments you wish to make to your original income tax return.
Submit Form 1040-X
Once you complete the 1040-X form, you can submit it to the Internal Revenue Service along with any supporting paperwork. If you have filed your IT return online, you may e-file the amended income tax return too. If you have filed your IT return through the mail, you can do the same with the 1040-X form.
The Internal Revenue Service might take up to 16 weeks to process an amended income tax return. Also, due to delays because of the COVID-19 outbreak, they have increased the deadline temporarily to 20 weeks.
Pro Tip
If you have any additional income taxes, you can file your amended income tax return and pay the income tax before the due date to limit interest and any penalty fines that might accrue on your account. The interest rate is charged on any income tax not being paid by the due date of the original income tax return without any regard for extensions.
Amending a Streamlined Filing Return
If you have filed your original income tax return using the Streamlined filing compliance procedure, you may still amend it as long as the Internal Revenue Service has not started the process of the income tax return. Once the Internal Revenue Service starts to evaluate the income tax return, you cannot amend it. You might not use Form 1040-X to amend a return filed via the Streamlined income filing program. Instead, you can follow these things:
- You may prepare corrected returns for the associated years along with the original submission. (For instance, if you have to correct a mistake on Form 8938 FATCA, you might have to file a new version of every Form 8938 that includes your original submission)
- You may submit an amended 14652 form to explain any modifications that you are making.
- You may write “Amended” in red ink at the top corner of the 14653 Form.
- You can also write “Amended Streamlined Foreign Offshore” in red ink on the top corner of each amended income tax return.
- You can also mail the amended income tax return and any additional income tax payments because of the Internal Revenue Service.
To get your amended income tax return into the correct hands, mail it to the address below:
IRS
3651 S. I.H. 35
MS 6063 AUSC
Attn.: Streamlined Procedures
Austin, TX 78741
Amend Your U.S. Income Tax Return with Help from an Expat Tax Expert
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FAQ
How long it takes to amend a return?
For a refund or even credit, you have to file a 1040 Form within three years after the date you filed your original IT return or within two years once you pay the income tax. It takes 16 weeks to amend an income tax return.
What if I put the wrong amount on my income tax return?
If you know that there was any error on your income tax return, you may amend it using 1040-X For, Amended U.S. Income Tax Return. For instance, a change to filing your income status, deductions, income, tax liability, or even credit means you have to amend your income tax return.
What raises red flags with the IRS?
There are a few red flags for an audit missing income, round members, excess credits or deductions, refundable income tax credits, and unreported income. The correct defense is proper receipts and paperwork.
How long it takes for IRS to process amended tax returns?
As a reminder, amended income tax returns might take 16 weeks to process it. It might take even three weeks once your file to show up in your system.
How long after the amended return is adjusted will it be completed?
The recent processing time is more than 20 weeks for both electronic and paper-filed income tax-amended returns. You may check the operations page to check. Also, you can call the IRS not to speed up return processing.