Amending Your Previous Year’s Return

Amending Your Previous Year’s Return

Published on September 05, 2023

Amending Your Previous Year’s Return To Recover Overpayments

Reviewing a previous year’s tax return for potential amendments and refunds can be particularly important for business owners. Here’s a step-by-step process for business owners to follow, along with an estimate of how long the process might take and a potential range for the refund:

Step 1: Gather Financial Records

Collect all relevant financial records for the tax year you want to review, including business income statements (e.g., profit and loss statements), business expense receipts, depreciation schedules, and any other supporting documentation.

Step 2: Download IRS Forms

Visit the IRS website ( and download the appropriate forms for amending a business tax return. Business owners typically use Form 1120X for corporations, Form 1065X for partnerships, or Form 1040X for sole proprietors with a Schedule C.

Step 3: Understand the Deadline

Check the deadline for filing an amended business tax return for the specific tax year. Consult the FAQ section for amended returns on the IRS website for this information. Generally, you have up to three years from the original filing date to amend a return and claim a refund.

Step 4: Identify the Changes

Review your original business tax return and identify potential changes that could result in a refund. Common reasons for amending a business tax return include:

  • Correcting errors in income or expenses.
  • Adjusting depreciation and amortization schedules.
  • Claiming missed deductions or credits.
  • Reclassifying income or expenses.

Step 5: Complete the Amended Tax Return

Fill out the appropriate IRS form (e.g., Form 1120X, 1065X, or 1040X) based on the changes you need to make. Include the original amounts reported, the corrected amounts, and the differences for each line item.

Step 6: Provide an Explanation

Attach a detailed explanation of why you are amending your business tax return. Include supporting documentation for the changes you’re making to substantiate your claims.

Step 7: Calculate the Refund or Balance Due

On the amended tax return form, calculate the difference between the taxes originally paid and the new amount you owe or are due as a refund.

Step 8: File the Amended Return

Print and sign the completed amended tax return and any additional forms or schedules necessary for your amendments. Mail the amended return to the IRS at the address specified in the form’s instructions. Keep copies for your records.

Step 9: Wait for Processing

The processing time for amended business tax returns can vary, but it typically takes several months. It’s advisable to check the status of your amended return periodically through the IRS website or their toll-free hotline.

Step 10: Receive Your Refund or Pay Any Balance Due

If your amended return results in a refund, you will receive it via check or direct deposit. If you owe additional taxes, pay the amount by the due date to avoid penalties and interest.

Step 11: Keep Records

Retain copies of all documents related to the amended business tax return, including the original return, the amended return, supporting documents, and correspondence with the IRS.

Estimated Time and Potential Refund Range:

The time required for this process can vary widely based on factors such as the complexity of your original return, the nature of the changes, and the IRS’s processing times. Generally, it can take anywhere from a few months to a year or more.

The potential range for a refund depends on the specific changes made to the return. Refunds can range from a few hundred dollars to thousands or even more, depending on the size and nature of your business and the corrections made.

To get a more accurate estimate of the refund amount and to ensure the process is handled correctly, it’s advisable to consult with a professional who specializes in business taxation. Schedule your free consultation with ISCPA today to find out how our tax team will review your 2021 & 2022 taxes absolutely free!

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