After you file your federal income tax return, you have up to three years to file an amended return, using Form 1040X. If you received an extension, you have three years from the date your return was filed. For issues relating to bad debts or worthless securities, you have up to seven years to file an amended return.
Say you’ve discovered that you underpaid your federal income tax when you filed your return. Perhaps you overlooked income you should have reported or you took a deduction that won’t stand up under scrutiny.
If that’s the case, file an amended return as soon as possible. You’ll stop the interest on your underpayment from running. And you’ll reduce the chance you’ll have to pay penalties if the IRS discovers the underpayment.
What if you can’t pay the tax you owe? File an amended return, anyway. Eventually, you may be able to negotiate a payment schedule with the IRS.