How to Amend Form 1040 and Submit Form 1040-X

Just joining us? Go to part one for the basics of Form 1040-X, Amended U.S. Individual Income Tax Return, formerly Form 1040X, and the guidance I would offer to a self-employed filer who needs advice on how to submit 1040-X. Subsequent columns will alert her and other filers to more aspects of 1040-X.

IRS responses to 1040-Xs. The news will either be good, meaning the filer is entitled to a refund (it doesn’t count as reportable income), plus interest (it counts), or bad, meaning she owes more in nondeductible taxes, interest and penalties. Let’s consider some common scenarios.

First, let's say the filer took the no-questions-asked standard deduction amounts (Line 12a on the 1040 for 2021) that’s authorized for nonitemizers and is adjusted annually to reflect intervening inflation. She later discovered that it would’ve been more advantageous to use Schedule A and itemize for outlays like medical expense (Lines 1-4), interest payments on her home mortgage (Line 8), state and local income and property taxes (Line 8) and donations (Line 10).

Second, let's say she operates her business as a sole proprietorship; she submitted Schedules C (Profit or Loss From Business) and SE (Social Security taxes for self-employed individuals). What she failed to include on Schedule C were write-offs for outlays like purchases of furniture and equipment or expenses incurred to attend work conferences or other meetings. 

Her 1040-X paperwork begins with filling out Schedule A and correction of Schedule C. Is her paperwork completed when she revises Schedule C to claim more write-offs and decreases the amount shown for net profit? Absolutely not.