Have you decided you need to change or correct your business tax return? Here's the process for making sure you make the corrections in the proper way. The procedure for filing an amended return depends on your business type.
Why You Must File an Amended Return
Some changes don't require you to file an amended return, while others do.
You don't need to file an amended return if:
- Your errors were just math errors—the IRS will make the changes.
- You forgot to attach tax forms—the IRS will ask for these.
You must file an amended business tax return if:
- You made a substantial error on your return that will affect your tax liability (the amount you owe).
- You received new information that needs to be included.
You must file an amended return If any of this information changes:
- Your income, including business income
- Your deductions, including business deductions
- Your tax credits, including business tax credits
- Your refund amount
- Your dependent information (on personal returns).
When to File an Amended Return
File Form 1040-X only after you have filed your original tax return. If you want a credit or refund you must file:
- Within three years (including extensions) after the date you filed the original return, or
- Within two years after the date when you paid the tax, whichever is later.
If you file early, your return is considered filed on the due date (May 17 for 2021 returns).
If your business was affected by a federally declared disaster, you may have extra time to file your return for that year.
If you are filing Form 1120-X for a corporation based on a tax carryback for years before 2018, you must file within three years after the due date of the return for those tax years.
Gather Information Before Filing an Amended Return
Before you begin the process of completing your amended tax return form, be sure you have:
- A copy of the amendment form for your business type for the year you are amending (the 2019 amendment form for amending a 2019 return, for example)
- A copy of the return you are amending, including all supporting forms and schedules (like Schedule C or Schedule K-1), and any worksheets you completed
- Any notices you received from the IRS about making adjustments to your return
- The amendment instruction form for the year you are working on
Amending Schedule C
Schedule C is used to report business taxes for a sole proprietorship or a single-member LLC. Schedule C is included in your personal tax return (Form 1040 or 1040-SR), so to amend your business taxes you must amend your entire tax return. You will need to use Form 1040-X to do this. If the change in Schedule C changes your business net income (profit) amount, it may change the rest of your tax return, including possibly your self-employment tax amount.
Here's how a change in Schedule C effects is reflected in your Form 1040-X:
- First, make the change to Schedule C, and prepare a corrected copy
- The amount of the change should affect Line 31—Net Profit or Loss.
- If your business had a change in profit, you must also complete a new Schedule SE for the change in self-employment tax.
- Both of these changes will affect Adjusted Gross Income on your Form 1040
- This changed amount is then included in Line 1—Adjusted Gross Income—on Form 1040X. You must include the original amount, the change, and the new amount.
- You must then change all the resulting calculations on your tax return.
- Be sure to attach a copy of the amended Schedule C (and Schedule SE that changed) when you file the amended return.
This article on How to Complete Form 1040-X to Correct Tax Return Errors has details on the process.
Amending a Corporate or S Corporation Return
To amend a tax return for a corporation, complete and file Form 1120-X. You'll need to make changes to specific line items, showing the original amount, the net change, and the correct amount, using a process similar to the one for Form 1040X.
You can apply for a quick refund of estimated taxes for your corporation by filing IRS Form 4466. This form can be used for Form 1120 but not form 1120-S.
To amend a tax return for an S corporation, create a copy of the original return (on Form 1120-S), and check Box H(4) (Amended Return) on the copy. Then use the copy to make the changes to the return, and re-file.
If the change in your S corporation taxes results in a change to shareholder information, you must also file an amended Schedule K-1 and give a copy of the amended K-1 to the shareholder. Make a copy of the original K-1, and check the correct box to indicate that it is an amended K-1. Then make the necessary changes.
Amending a Partnership or Multiple-Member LLC Return
To amend a partnership or multiple-member LLC return, make a copy of the partnership return Form 1065, and check box G(5) on page 1. Attach a statement that identifies the line number of each amended item, the corrected amount or treatment of the item, and an explanation for each change.
Most partnerships or LLCs can amend their partnership returns using Form 1065, but some partnerships or LLCs may need to use Form 1065X to amend their partnership return in certain specific cases. Check with your tax professional if you think you need to use this form.
If the Schedule K-1 on the partnership or LLC return is incorrect, or if the change to the Form 1065 causes a change in the information on the K-1, prepare an amended K-1. Check the "Amended K-1" box on the top of the Schedule K-1 to indicate that it has been amended. Then give the amended Schedule K-1 to the partner or LLC member to file.
Add an Amended Schedule K-1 to Your Tax Return
If you are an S corporation shareholder, a partner in a partnership, or a member of a multiple-member LLC business, you get a Schedule K-1 to show your share of the income or loss of the business. If your Schedule K-1 has changed after your tax return has been filed, this change affects your personal tax return. Use Form 1040-X to show these changes on your tax return. Don't forget to include any changes to your self-employment tax from changes in your Schedule K-1 income.
Filing and Paying Taxes on an Amended Return
Paying Additional Taxes on an Amended Return
If you must pay more tax because of an amended return, you can do so by including your check with the return, or you can file electronically, using one of the IRS tax payment options. Corporations must use the EFTPS system to pay corporate taxes electronically.
Filing An Amended Return
For 1040-X, the address depends on special situations and where you live. See the Instructions for Form 1040-X for the list of addresses.
For Form 1120 for corporations, file the amended return at the same address where the corporation filed its original tax return.
Corporations and S corporations can use the IRS E-file system to file their tax returns online.
You can file an amended partnership return by mailing it to a specific IRS office, depending on certain circumstances. See IRS Form 1065 for the list of locations.