If you file your income tax return and then discover that you missed some important breaks or made mistakes, it's not too late for a second chance. You have up to three years after the tax-filing deadline to file an amended return, which means you still have time to file an amended return for 2017, 2018, 2019 or 2020, if you have already filed. (The window for collecting a 2017 tax refund will close on May 17, 2021).
If you can take advantage of additional tax credits or deductions, you may get back extra money in a refund — or you may be able to stop the clock on possible penalties if you're fixing a mistake. Here are some common reasons for filing an amended return and the steps you need to take.
You missed valuable tax breaks
This is the time of year when people learn about frequently overlooked tax deductions and credits — and they may also realize that they missed some of these breaks in the past, too.
For example, a lot of people miss the retirement saver's tax credit, which can reduce your tax liability by up to $1,000 (or $2,000 if married filing jointly) if you made any contributions to a retirement savings plan, such as an IRA (traditional or Roth) or 401(k). To qualify for 2020, your modified adjusted gross income (AGI) must have been $65,000 or less if married filing jointly, $48,750 for head of household or $32,500 for single and other filers (and slightly lower for previous years). See the IRS's Saver's Credit factsheet for more information.
If you paid for continuing education classes at an eligible educational institution — even if you aren't going to school part time or enrolled in a degree program — you could be eligible for the lifetime learning credit, which can be worth up to $2,000 per tax return per year. To qualify for the credit for 2020, your modified AGI must be less than $69,000 if filing as single or head of household, or $138,000 for married filing jointly. See IRS Publication 970 Tax Benefits for Education for more information.
If you missed a deduction or credit, you can go back and amend your federal return to take advantage of the break and get an extra refund. You may get an additional benefit by amending your state income tax return, too.
The tax law changed
Sometimes tax laws change retroactively after you file your return, and you can file an amended return to take advantage of the new break.
It isn't unusual for temporary tax benefits to expire after a certain number of years and then be extended retroactively. For example, some tax breaks that expired at the end of 2017 were reinstated by Congress in 2019 — and were extended retroactively for 2018, too. “Anyone who qualified for those benefits on their 2018 returns would have already filed,” says Nathan Rigney, principal tax research analyst at the Tax Institute at H&R Block.