If a taxpayer makes a mistake on their federal income tax return, they generally have to file an amended tax return. However, a superseded tax return may be an available option. 

A superseded tax return is a tax return filed after the initially filed tax return and filed within the original filing period, including extensions. 

Why is the Superseded Option Better?

A superseded return is generally preferable to an amended tax return because it is a complete override of the original tax filing. Filing a superseded return is as if the taxpayer never submitted the original return. 

Depending upon the error on the original return, the superseded return can be a lifesaver. Let’s look at a comprehensive example for John Taxpayer.

Example Fact Pattern for Superseded Returns

John Taxpayer is preparing to file his 2023 Form 1040 (US Individual Income Tax Return), which is due April 15, 2024. On April 15, 2024, John decides to file an extension request via Form 4868. The extended deadline for filing his Form 1040 is now October 15, 2024. John files his Form 1040 on June 1, 2024. 

On July 15, 2024, John discovered he made a mistake on his tax return and needed to file an amended return. Because John extended his tax return to October 15, 2024, he can file a superseded return instead of filing a Form 1040-X (Amended US Individual Income Tax Return), so long as John submits the superseded return on or before October 15, 2024.

In 2023, John opened a non-U.S. brokerage account with UBS Bank in Switzerland. On November 15, 2023, John transferred $125,000 of cash to his UBS Account. The account earned $101 of interest income, and the year-end account value was $125,101.

On John’s original Form 1040, he reported the $101 of interest income on Schedule B (Interest & Dividends). However, John made the following errors:

  • He should have disclosed on Schedule B Part III that he had a foreign account in Switzerland. 
  • He should have filed an FBAR with FinCEN on Form 114 (Report of Foreign Bank Accounts) to disclose the foreign assets. 
  • He should have included Form 8938 (Specified Foreign Financial Assets) with his Form 1040.

Failure to file Form 8938 is a $10,000 penalty. If John files an amended tax return to include Form 8938, it would technically be a late filing and could subject John to the $10,000 penalty. However, John is in luck. 

John could file a superseded Form 1040 tax return to make all necessary corrections. 

The superseded return option is available if the new return is filed before October 15, 2024. John also has until October 15, 2024, to submit the FBAR to FinCEN. By filing the superseded return before the extended deadline, Form 8938 would no longer be considered a late filing, so John can avoid the $10,000 penalty.