Does Amending a Previous Year's Taxes Affect the Current Year's Return?

by A. Elizabeth Freeman, Demand Media

    Everyone makes mistakes. If you made a mistake on a previous year's tax return, you should file an amended return, or form 1040X. You can file 1040X up to three years after the due date of the original return, or up to two years after you paid the tax, whichever comes later. Amending a previous year's tax returns does not have much or any impact on the current year's return.

    Why Amend a Return

    Amend a tax return to correct any mistakes you made on the original return. For example, you and your spouse may have filed separately only to realize that you would save money if you filed jointly. Other reasons to amend a tax return include adding a deduction you forgot or reporting additional income. You can also change the number of dependents you claim. Depending on what you need to change, your tax refund may increase or you may owe taxes.


    Amending your tax return might mean you get a larger refund. If that is the case, you have two options. You can receive a check from the IRS, or you have the option of applying the past year's amended refund to your current year's estimated taxes due, which is the one way filing an amended return impacts the current year's taxes.

    Tax Owed

    If you forgot to include income on your original return and add it to your amended return, you might wind up owing tax. Depending on when you file the amendment, you may also need to pay interest on the tax owed. For example, if you file an amended 2010 return in April 2012, you may owe 12 months worth of interest on the tax due. You may also need to pay a penalty on the extra tax, since you did not pay it by the due date.

    State Taxes

    Filing an amended federal tax return affects your state tax return as well. The IRS warns filers to contact their state department of revenue or tax agency for information on what to do. Most states also have an amended tax return form that you need to complete to adjust your income or other tax information. You may need to pay the state more money or you may be eligible for a larger refund from your state.

    About the Author

    Based in Pennsylvania, A. Elizabeth Freeman has been writing professionally since 2007, when she started writing theater reviews for and Theater Talk's New Theater Corps blog. Since then, she has written for Phillyist, TheNest, ModernMom and "Rhode Island Home and Design" magazine, among others. Freeman has an Master of Fine Arts in dramaturgy/theater criticism from CUNY/Brooklyn College.