Extension to File Taxes vs. Amended Tax Return

This year, you have until April 17 to file your tax return.

But those extra few days don’t necessarily mean that you are ready.

You might want a little more time to get things together, or you might need to make changes to an already-filed return.  It is important to understand the difference between a tax extension and an amended return.

Tax Filing Extension

If you don’t think that you will be able to complete your tax return on time, you can file a Form 4868.  This short form is your extension to file form.  You can file this form electronically.  A tax filing extension provides you with six extra months, meaning you won’t have to have your return ready to go until October.

You’re not off the hook for paying your taxes, though.

You still have to pay what you owe — or what you think you owe — by Tax Day.  Of course, if you are due a refund, you won’t see that until you have actually filed your tax return.

Amended Tax Return

Filing an amended tax return is a completely different process.

Instead of asking for extra time, you are changing what you have already filed.  This can be because you need to add more income, or because you want to take a tax credit that you missed before.  Normally, if you want a credit or a rebate, you have to file your amended return within three years of your original filing.  So you are still eligible to file an amended return from other tax years.

The proper paperwork for an amended tax return is Form 1040X.  If you expect to receive a rebate, it’s best to wait until after you have your refund.  In any case, you will need to wait until the IRS has accepted your original refund to file an amended return.  Your Form 1040X will allow you to enter original amounts in one column, and the new amounts in another.

You should note that, even though you can file your tax return electronically, and file for an extension electronically, you will probably have to mail in your amended tax forms.  The IRS does have a fillable Form 1040X, but you will have to print it out and mail it in by hand if it is for any year prior to tax year 2010.

Interestingly, the IRS is allowing you to file an amended return electronically starting with tax year 2010.  So, if you have already filed your return for tax year 2010, and you find that there has been a mistake and you need to amend your return, you can actually do this electronically.  Check eFile.com for information on how to do this properly. [Note: there may be some items, such such as the First-Time Homebuyer Tax Credit, that require you to file by mail.]

Because of the extra difficulty in filing an amended tax return — if if you can file electronically — many choose to file for an extension if they think that some of their information will be missing or incomplete come Tax Day. What you decide depends on your own circumstances.  You can consult a trusted tax professional for advice on what might work best for you.

And remember: In either case, you still have to pay on time.

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