What If You Forgot to Deduct Your IRA Contribution?

The IRS accepts taxpayers' revisions of past returns.

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Not every deposit you make to an IRA is tax-deductible. Roth IRAs give you a tax break when you start taking distributions at retirement while traditional IRAs work the other way: You take a deduction the year you set the money aside and pay income taxes when you withdraw it. If you forget to deduct your traditional IRA contributions, use IRS Form 1040X to amend your tax return for that year.

About Form 1040X

Generally, you report your IRA contributions to the IRS on Form 1040. If you realize, after filing your tax return, that you failed to claim the deposits, use Form 1040X to amend the original return. The 1040X is the document you use not only to adjust Forms 1040, 1040A, 1040EZ, 1040NR and 1040NR-EZ, but also when you want to make tax elections after the deadline has passed or if you need to change amounts the IRS revised in your original return. In addition, use Form 1040X to claim a carryback resulting from a loss or unused credit.

IRA Contributions Treatment

Although you get to subtract the contributions you make to a traditional IRA from your taxable income, you do not report the amount with your standard or itemized deductions. When you claim the deposits, you have to write them in the “Adjusted Income” section of Form 1040. Thus, when you amend your return to include a forgotten contribution, you must treat it the same way.

Completing Form 1040X

Form 1040X and its instructions are available for download at irs.gov. When completing the form, check off the tax year that the amendment is for or fill in another year. To claim a refund, you generally need to file the 1040X within three years of the original filing or two years of paying any tax. Include your name and taxpayer information -- and your spouse's if you filed jointly. Select your filing status and proceed to “Income and Deductions,” line 1, “Adjusted Gross Income.” Write in column A the AGI you reported on the original Form 1040. In column B, indicate by how much that amount has decreased. If your initial AGI was $50,000 and your unreported IRA contributions totaled $5,000, write $5,000 in column B. Column C is for your AGI’s revised amount, $45,000 in this example. Go to Part III to explain the reason for the amendment. Sign and date form 1040X. If you filed the original application jointly, your spouse must also sign the revision.

Filing Form 1040X

Since the IRS does not accept tax return amendments electronically, you have to print the completed Form 1040X to file it by mail. The appropriate address varies according to where you live, and other criteria also determine where amended returns should go. Refer to the form’s instructions for the mailing address that applies to you. After you finish amending your federal return, check with your state revenue agency to find out whether you should also amend your state return.