Quick answer

If the depreciation mistake is a straightforward math error, omission, or misreported deduction for a prior year, file Form 1040‑X with a corrected Form 4562 and supporting schedules. If the problem is a change in depreciation method or another accounting-method issue that affects multiple years, consider filing Form 3115 (Application for Change in Accounting Method) instead—this often avoids amending multiple past returns. (IRS: About Form 1040‑X; IRS: Form 3115.)

Why depreciation errors matter

Depreciation controls when you deduct the cost of business or rental property. A misapplied method, wrong recovery period, or failure to elect section 179/bonus depreciation can understate or overstate deductions and alter taxable income across years. Correcting these errors can lead to refunds, additional tax due, or changes in future depreciation schedules. See IRS Publication 946 for rules on depreciating property (https://www.irs.gov/publications/p946).

Decide: file a 1040‑X or submit Form 3115

  • File Form 1040‑X when the correction is limited to one or a small number of prior-year returns and is a straightforward error (calculation, omitted deduction, corrected basis). Attach a corrected Form 4562 for that tax year and a clear explanation. (IRS: About Form 1040‑X.)
  • Use Form 3115 when you need a formal change in accounting method—for example, switching from straight‑line to MACRS, or correcting a method you used consistently. Form 3115 requests a Section 481(a) adjustment that can spread the correction into the year of change instead of filing multiple amended returns. The IRS publishes automatic change procedures for many depreciation-related method changes. (IRS: About Form 3115.)

Step‑by‑step: How to amend for a depreciation error (individual/small business)

  1. Identify the error and gather records
  • Locate the original tax return, the original Form 4562, asset invoices, depreciation schedules, purchase dates, placed‑in‑service dates, and any prior-year adjustments.
  1. Determine whether the mistake is a method/accounting change or a one‑year error
  • If you mistakenly used the wrong recovery period or failed to elect bonus depreciation for a single year, a 1040‑X may be appropriate.
  • If the taxpayer applied a method consistently over multiple years but it was incorrect, Form 3115 may be required.
  1. Prepare corrected supporting forms
  • Complete a corrected Form 4562 for the year the depreciation was misreported. If multiple asset categories are affected, provide an updated asset schedule with each asset’s basis, placed‑in‑service date, recovery period, convention, and method.
  1. Complete Form 1040‑X
  • In Column A list the originally reported amounts, Column B the net change, and Column C the corrected amounts. Include a clear explanation in Part III (or the designated explanation area) that details the depreciation correction and references attached schedules.
  1. Attach documentation
  • Attach the corrected Form 4562, the revised asset schedule, invoices, and any prior correspondence. If the change also requires amended business returns (Form 1065, Form 1120‑S, or Form 1120), include those or indicate they’ll be amended and supply corrected K‑1s to partners/shareholders.
  1. File and track
  • Mail or electronically file the amended return where permitted. The IRS accepts e‑filed 1040‑X for many filers using approved software; check current IRS guidance. Track processing times—expect several weeks to months; see our guide on tracking amended return processing times for current expectations.

(For a full walkthrough of completing Form 1040‑X, see our step‑by‑step guide: How to File an Amended Return (Form 1040‑X): Step-by-Step Guide: https://finhelp.io/glossary/how-to-file-an-amended-return-form-1040-x-step-by-step-guide/.)

Business entities: special rules and K‑1 adjustments

  • Partnerships (Form 1065) and S corporations (Form 1120‑S) generally report depreciation at the entity level and issue Schedule K‑1s to owners. If depreciation is changed, the entity usually amends its return (Form 1065 or 1120‑S) and issues corrected K‑1s. Recipients of corrected K‑1s then determine whether they need to file Form 1040‑X.
  • C corporations amend with Form 1120‑X. If entity returns are amended, coordinate timing so owners can file their amended individual returns within the refund statute where relevant. See our guide to amending business returns for differences between Form 1120‑X and 1040‑X: https://finhelp.io/glossary/step-by-step-guide-to-amending-a-business-return-form-1120-x-and-1040-x-differences/.

Forms to attach and line items to update

  • Corrected Form 4562 (Depreciation and Amortization) for each affected year: show the corrected depreciation figures and attach an asset schedule. (IRS: About Form 4562.)
  • If the error affects business income, attach corrected business returns (Form 1065, 1120‑S, 1120) or indicate the filing plan.
  • For method changes, include Form 3115 or a statement if the change is covered by IRS automatic procedures.

Timing, statute of limitations, and refunds

  • Refunds from an amended return generally must be claimed within the earlier of three years from the original return date or two years from the date you paid the tax, whichever is later. This is the general refund statute; check specifics or exceptions if you have special situations. (IRS Publication and Form instructions.)
  • Processing times for amended returns can vary. Historically, the IRS has advised a processing window of weeks to months; recent backlogs have extended that. See our tracking guide for practical expectations: Tracking Amended Return Processing Times: https://finhelp.io/glossary/tracking-amended-return-processing-times-what-to-expect-after-filing-form-1040-x/.

Practical strategies and professional tips

  • Don’t rush to amend if a simple math correction will be handled by the IRS: the IRS may correct math errors and notify you. But for depreciation misapplications, proactively amend or file Form 3115 to prevent future audit issues.
  • When in doubt, prepare both: a corrected Form 4562 and a draft Form 3115. A CPA can advise whether the Department of the Treasury’s automatic change procedures apply (often the faster, cleaner route for method changes).
  • Keep complete asset logs. I advise clients to store an asset workbook with purchase contracts, place‑in‑service dates, and depreciation entries—this saves time if you must reconstruct prior years’ schedules.
  • Coordinate entity and owner filings. If you run a partnership or S‑corp, amend the entity first and issue corrected K‑1s so owners can file consistent 1040‑X returns.

Common mistakes to avoid

  • Attaching no explanation: the IRS needs a clear reason for the change. Provide computations and the corrected Form 4562.
  • Treating a method change as a one‑year fix—this can lead to inconsistent reporting and trigger penalties. Instead, evaluate Form 3115.
  • Missing the refund statute deadline: calculate the three‑year/two‑year window from the original filing/payment dates.

Example scenarios

  • Simple omission: You forgot to claim depreciation for a piece of rental equipment in 2021. You can file a 2021 Form 1040‑X attaching a corrected Form 4562 and supporting receipts, seeking a refund within the statute of limitations.
  • Method change: You depreciated commercial real estate using straight line when you should have used MACRS and that error spans multiple years. A Form 3115 requesting an accounting method change and a Section 481(a) adjustment may be cleaner than filing amended returns for several years.

FAQs (short)

  • Can I e‑file Form 1040‑X? The IRS allows e‑filing of many amended returns through supported software; verify with your provider and the IRS e‑file guidance. (IRS: About Form 1040‑X.)
  • Do I need a tax pro? For simple corrections you can often amend on your own, but depreciation and accounting‑method changes frequently benefit from a CPA or enrolled agent.
  • Will amending trigger an audit? Filing an amended return doesn’t automatically trigger an audit; it does, however, provide the IRS with a reason to review the corrected items.

Professional disclaimer

This article is educational and does not replace personalized tax advice. For complex depreciation errors, accounting method changes, or multi‑year adjustments, consult a qualified CPA, tax attorney, or enrolled agent who can review your specific facts and prepare any required Forms 1040‑X, 3115, or amended entity returns.

Sources

Related FinHelp guides:

If you want, I can help you draft the explanation text and corrected Form 4562 lines for a specific scenario—provide the asset details, year in question, and original depreciation method used.