Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail
Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail

Form 1040X

What it is:

Mistakes happen, and the IRS understands that (though the jury is still out regarding how forgiving the IRS is about mistakes). For this reason, the IRS provides the Form 1040X, which requires a line-by-line description of any necessary adjustments, as well as supporting documentation and explanations.

How it works (Example):

Let's say John Doe files his tax return on April 15. After he sends the return in, he realizes he forgot to include some dividend income on his tax return and has understated his tax liability. So, he files a Form 1040X to inform the IRS that he is amending his return.

Why it Matters:

A Form 1040X is a tax form used to amend a previous tax return.