Which Form Should I Use to Amend My Business Tax Return?
If you’ve made an error on your business’ or organization’s tax return, the federal government requires you to send in an amendment to correct and update your filing. It’s important to make these corrections as soon as you can, in case the IRS audits your business — whether at random, or because they have questions about your tax return or want to further verify your information.
The IRS has a slew of forms available for those who need to amend a tax return, but knowing which form to use for your particular situation can be tricky. Here’s a breakdown of the various forms, when they apply, and how to use them.
When to Amend
The IRS requires your business to submit an amended tax return to correct any information that may affect tax calculations. This includes (but is not limited to) filing status, dependents’ status, income credits, and tax deductions. Any information you receive after your filing date that would materially affect your liability should institute a tax amendment.
You do not need to send in an amended return:
- To correct mathematical errors — the IRS will correct those independently.
- If you forgot to include a tax form or schedule — any missing forms or schedules will be mailed to you by the IRS.
An amended tax return must be filed on paper and cannot be submitted digitally. The IRS requires you to mail an amended business tax return within three years of the original filing or within two years of taxes paid, whichever occurred later. Regardless of which form you use, you must correct every mistake made during the original filing, not just those that personally benefit your business.
Use Form 1040X if you are a (pass-through) sole proprietorship or single-member LLC amending business tax returns, including changing a Schedule C.
If you are amending multiple returns, prepare a Form 1040X for every return and mail each in a separate envelope. If you are claiming an additional refund, you should wait until you receive your first refund before filing another, but feel free to cash your original check while waiting for an additional refund to arrive. If you are paying additional taxes owed, file your Form 1040X and pay those additional taxes as soon as possible to lessen accrued interest and penalties.
A Form 1040X may take up to 16 weeks (or even longer in extreme circumstances) to be fully processed, so in order to keep you up to date on the process, the IRS now enables you to track its progress on their website or via telephone.
If you are a partnership or multiple-member LLC wishing to file an amended business tax return, you must send your amended Form 1065 — including any changed schedules such as Schedule K-1 — to the address where the original return was filed. Check the box “Amended Return” on Line G of the form. Partners must be sure to include all partnership items on tax returns.
If you are a Subchapter S corporation wishing to file an amended business tax return, you must send your amended Form 1120S to the address where the original return was filed. Check the box “Amended Return” on Line H of the form.
Note that S corporations pay taxes differently than LLCs. S corporations are responsible for paying taxes on owner salaries as well as the remaining net profit, whereas LLCs compute their taxes based on an owner’s individual tax return in relation to their percentage of ownership in that company.
If you are a Subchapter C corporation wishing to file an amended business tax return, you must send your amended Form 1120X — including any changed schedules — to the address where you filed your initial return. On this form, supply the new totals calculated with the new information you’ve gained since your original return. Form 1120X doesn’t feature every step included on Form 1120, so you may want to refer back to your original form to help you calculate your totals.
Need More Help?
The best way to ensure that your amended business tax forms are filed correctly and on time is to consult with a professional tax attorney, who will review your information thoroughly and help protect you from accruing fees, interest, and IRS penalties.