How to Complete and File an Amended Business Tax Return
Tips on Filling out Forms 1040x and 1140x
Have you decided you need to amend your business tax return? Here's the process for making sure you file the correct return and how to complete the amended return. You don't need to file an amended tax return for math errors or if you forgot a form. The IRS will take care of the math errors and ask you for the form.
How to Amend a Business Tax Return
The procedure for filing an amended return depends on your business type:
Sole Proprietor or Single-Member LLC
For a sole proprietor or single-member LLC filing on Form 1040X. Because you filed your business taxes on Schedule C along with your personal tax return, Form 1040X works for both. A change in Schedule C will affect the rest of the your tax return, including possibly your self-employment tax amount.
Here's how a change in Schedule C affects is reflected in your Form 1040X:
- First, make the change to Schedule C and prepare a corrected copy.
- The amount of the change should be reflected on 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. This new amount is entered on Line 27 of Form 1040.
- Both of these changes will change 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 when you file the amended return.
William Perez, Tax Planning Expert, has a guide to filing Form 1040X for an amended tax return. To amend tax returns for other business forms, it's best to use a qualified tax preparer, as these forms are complex.
Amending a Corporate or S Corporation Return
- To amend a tax return for a corporation, file form 1120x.
- To amend taxes for an S corporation, create a copy of the original return (on Form 1120S), 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 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 of the reasons for each change.
If the Schedule K-1 on the partnership/LLC return is incorrect, or if the change to the 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/member to file.