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US Expat Taxes: How to File an Amended Return from Abroad (and why you might want to do it)

Filing a US expat tax return can be challenging – especially if it’s the first time you’ve had to file taxes as an American Expatriate.  Because filing a US expat tax return is as complicated as it is, it’s not uncommon for taxes to be filed incorrectly or incompletely.  Income may have been forgotten, deductions may not have been taken, and the list goes on.  In this article, we will take a deeper look at why an amended return is necessary and a few things you should know about filing such a return.


Why File an Amended Tax Return?

The broad answer to this question is:  You should file an amended return if the information on your original US expat tax return is incorrect. It’s possible that you will discover that you misfiled your taxes somehow on your own, and it’s also possible that the IRS will notify you of your mistake and insist that you file an amended return.  This, of course, is generally only in a situation in which the IRS would receive more money; they probably won’t require you to file an amended return if you missed some of the deductions that are available to you.


So what are the reasons why you would need to file an amended return?


Missing Income

Perhaps you filed your US expat tax return and subsequently received a W-2 or 1099 in the mail that wasn’t claimed on your taxes.  Maybe you had self employment income you forgot to report.  Whatever the case may be, you should file an amended return so that all income is reported.


Missing Forms

There are a variety of schedules and forms required along with Form 1040.  Different types of income are reported on these forms, and it’s possible that you either didn’t claim the income you were supposed to or you simply entered it into the wrong line on the wrong form.


Incorrect Information on Forms

This is a rather broad reason for needing to file an amendment US expat tax return, as it could be one of many things that are wrong with the form.  Perhaps you claimed more dependents than you actually had or, conversely, failed to claim all of your dependents.  It’s also possible that you filed with the wrong status.  These and other mistakes may affect the size of your return or the amount you owe to the IRS significantly.


Missing Deductions or Exclusions

American Expatriates have a wide variety of deductions and exclusions available to them to help minimize their US tax liability.  It’s possible that you just found out about certain exclusions or deductions you didn’t even know existed when you filed your original US expat tax return.  If you owed the IRS in previous years, you may be entitled to a refund after filing an amended return and claiming all the deductions and exclusions available to you.


Improperly Claimed Deductions or Exclusions

As easy as not knowing about deductions which are available to you is claiming deductions for which you don’t actually qualify.  Perhaps you heard about the FEIE (Foreign Earned Income Exclusion) but you were unaware of the physical presence requirements of having lived in your host country.  If you hadn’t lived there for at least 330 days prior to your filing a return, you do not qualify for the deduction and would – therefore – need to file an amended return to correct your mistake.


Time Limit for Filing an Amended US Expat Tax Return

Whether you discovered your filing mistake on your own or you were notified by the IRS that you are required to file an amended return, it’s best to get it done and over with as soon as possible.  The more rapidly you correct the situation, the more additional fees and interest you can avoid.  If you’re expecting to receive a refund after you file your amended return, it must be within 3 years of having filed your original return.  If you are amending a return older than 3 years, you will not receive a refund from the IRS.


How to File an Amended US Expat Tax Return

First things first:  You cannot electronically file an amended return; paper returns for amending an original return are required.  The form you need to file is Form 1040X, Amended US Individual Income Tax Return.  You can find this form on the IRS website.  If you are filing amended returns for multiple years, remember that you must file a different Form 1040X for each year.  For easier processing, make sure to send each year’s amended return in a separate envelope.  If you received a letter from the IRS, make sure to send you return to the IRS Service Center outlined in the letter.  If you did not receive a letter from the IRS, be sure to follow the instructions for Form 1040X and mail your amended return(s) to the indicated IRS Service Center.


Additional Details about Form 1040X

Make sure to clearly indicate the year for which you are filing an amended return at the top of Form 1040X by checking the appropriate box.  Also, make sure to check the correct filing status for the corresponding tax year, even if it isn’t changing.


To fill out Form 1040X, you will be required to fill out 3 columns next to each entry on the form.  The first column will be the information on your original return.  The second column will be the difference between the original and the amended amount, and the third column will be the actual amended amount.  You will be required to provide all this information for every detail about income, deductions, and all other lines on the form.


There will be a section (Part III) on Form 1040X for you to state the reason of needing to file an amended US expat tax return.  If you do not have enough room on the form for your explanation, you may attach an additional sheet outlining your reasons for having to file an amended tax return.

Conclusion

If you are a US Expatriate and your previous years’ returns had significant balances owed to the IRS, it’s possible that you failed to take some or all of the deductions and exclusions available to you.  If you feel like you may receive a refund by filing an amended return with the IRS, make sure to contact a US Expat Tax Professional to discuss your circumstances.  If you’ve received a letter from the IRS informing you of a requirement to file an amended return and you need help filing Form 1040X, Taxes for Expats can help.