How do I Correct Errors in a Previous Tax Year?

To Correct Errors in a Previous Tax Year

“If you want to correct errors in your tax return from a previous tax year. The process depends on the type of error and the tax authority in your country.”

Keeping track of taxes is nothing less than a feat. This is essentially, because, the process of tax maintenance is rather tedious; hence the need for knowledge-based tools, tricks and tips goes a long way in ensuring that a major ton of the otherwise laborious and boring task is well taken care of. However, there are times when you might be faced with an issue where you might need to trace back a certain step or procedure previously done. How do I correct errors in a previous tax year is one such quest where we often need assistance. So, what is this all about and how to resolve it? Here are our top recommendations and resolutions;

The Errors in a Previous Tax Year

The taxpayers are allowed to amend the tax returns either for up to two years or three years from the date of filing, whichever occurs later in order to pay their income taxes. In case an error has been discovered by a taxpayer on their previous year’s tax return, then an IRS Tax Form 1040-X needs to be filed, Amended U.S. Individual Income Tax Return, as soon as the mistake has been discovered. It is not required for taxpayers to file amended returns to the IRS. This is generally because the government automatically rectifies them. But, there are times when you might want to refund in case of the overlooked tax credits, or deductions or to make payments for the additional tax liabilities. For this, the taxpayers need to amend their returns by making use of the official IRS Form 1040X.

Read More-: Sage 50 Corporation Tax Error 9288

Step to Correct Errors in a Previous Tax Year

Here are the steps to conduct when you are facing the issue:

  • Start by downloading the IRS Form 1040 X, Amended U.S. Individual Income Tax Return. In order to avoid penalties, you need to accomplish the filing by April 15 of the following tax year. You need to file the IRS form 1040 X only in case the tax returns have been filed for the previous year. It is recommended to avoid completing the amendment until you are amending the filing status or taxable income, claiming or deducting credits or claiming or correcting deductions.
  • As a user, you need to Print your full name, address, telephone number and social security number on the top half of the form. Also, re-check the relevant boxes of the tax year being amended. In order to amend the 2010 tax returns, you need to check the 2010 box. Also, include your spouse’s tax information if required in case of filing a joint return. 
  • Check for the relevant filing status box. In case you are not rectifying or changing the filing status, check the box for the filing status that has been used to file the original returns. In case you have filed your taxes jointly you need not have to amend the filing status to file separate tax returns. 
  • Now, ensure that you have completed lines 1 to 5 by entering the original amounts from the previous years’ tax returns as stated in Column A of lines 1 through 5. As in Column B, you need to enter the net changes, that reflect the total decrease or increase for each line item. In case you are amending the income to include an additional income, a change in exemptions or including the overlooked deductions, you need to complete lines 1 through 5. 
  • Next, you need to complete lines 6 through 10 in order to correct the tax liabilities. Also, complete Columns A through c. 
  • Now, you need to complete Line 11 if you are amending the withholdings or the social security taxes. 
  • You need to complete line 12 in case you are making estimated payments. Also, include the previously paid estimated taxes in Column A. You also need to enter the net difference in column B and enter the liabilities in Column C. 
  • Next, you need to complete line 13 if you are claiming the earned income credit for the first time. Also, it is required to attach Schedule EIC of Form 1040. 
  • Now, enter the total payments based on Column C and Lines 1 through 15 to complete Line 16. 
  • Now to complete Part III, which is the explanation of Changes. This should also include all the reasons for amending the returns. Also, any other schedules or documents can be attached in support of your reasons for the amendment of your returns. Also, any other relevant information can be included in case you have made a mistake and do not wish to pay any penalties for late submissions. 
  • Next, sign and date the amended return. In case of filing the joint return, your spouse should also sign and date the form. 
  • The amended taxes return packet needs to be complied with by enclosing any corrected tax forms, which can include W-2s or 1099s Tax form and also enclose any additional documentation, schedules or forms in order to support Part III. 
  • Next, enclose the check or money order if you owe any taxes. Also, you do not need to attach the check in order to amend the tax return or to any additional documentation. You just have to place it in an envelope without affixing it to any forms. 
  • Finally, you have to mail the tax returns and the same cannot be done electronically. Also, one can use the IRS interactive maps to acquire the address of the local IRS service center. The amended returns are processed by the IRS within 8 to 12 weeks from the date of receipt.

Using Sage 50 or the Process of Rectification to be Done on a Previous Year’s Tax Return

To do so, you need to perform the following processes:

Backup Data

  • Go to the File menu
  • Click on Backup
  • Click on NEXT
  • Click on NEXT 
  • Click on BROWSE
  • Go to where you need to save the backup 
  • Click SAVE
  • Click Next 
  • Click FINISH

Printing of the Historical Payslips

  • Go to the employee’s list
  • Click on employees that need to be corrected
  • Click on Tasks
  • Click on Historical Reports
  • Go to the Form option 
  • Here, you need to enter the process date of the latest period that has been updated
  • If necessary you need to enter a Department and Cost Center 
  • Click OK
  • Click on the required Payslip option 
  • Click Print
  • Check if the correct printer appears 
  • Click OK

To Roll Back the Current Tax Year

  • Go to the employee list, 
  • Click the employee that needs to be rectified
  • Click on Tasks
  • Click on Rollback
  • Click on NEXT
  • Check for the correct employees to appear
  • Click on NEXT 
  • Select the first pay period of the tax year
  • Click FINISH 
  • Click on NO to the notification that appears ‘
  • Click on OK

Correcting Errors Made in Case of Tax Payments made Online

In case of errors made for the tax payments made online, the taxpayer will have to contact the jurisdiction assessing officer and make the corrections in the challan details. Every taxpayer is assigned an assessing officer for the assessment of tax returns and other related issues. The relevant jurisdiction assessing officer can be located through the tab known as ‘Know your AO’ on the e-filing portal. The data can also be assessed by the user with the use of the mobile-based OTP. Likewise the same can also be found through the e-filing account within the e-filing portal. This is located within the profile settings-My profile-PAN details’

Once this has been done, you can approach the assessing officer at their office and place a request for the required correction.

Also Read-: Fix Sage 50 Error User Maintained Tax Tables are Missing or Damaged


So, there you have it people, these are the facts, features and solutions related to How do I correct errors in a previous tax year. However, if you still have doubts regarding the same, be sure to reach out to us at +1800-964-3096 or drop a mail at [email protected]  or you can also join our LIVE sessions at

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💠Frequently Asked Questions💠

How to Fix an Error that has occurred on the previous years’ Tax Returns?

An error that has occurred in the previous year’s tax returns can be done by filing an amended return. For this, you simply have to use form 1040-X, Amended U.S. Individual Income Tax Return, and follow the instructions.

Is there a Time limit for the Rectification of the Income Tax Return?

The rectification of the income tax return can be done within 6 months from the end of the month in which the application is received by the authority.

What happens if a mistake has been filed on the Income Tax Returns?

According to section 139(5) of the Income Tax Act allows the user to revise your income tax return in such a situation. For this, the user needs to log in to their income tax portal, and on the dashboard select the File Revised Return option. From here the user can file the return for the same assessment year again.21-Jul-2022

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