Summary: Email is timestamped by the program that creates it. Normally Window's time, date and time zone are used. Web services, however, need a little more.
How do I fix the time on my email? The time on my computer is correct, but when I send emails, the time's an hour ahead! What's wrong?
You nailed the one thing that many people forget: the time on their computers.
However, depending on your mail service, you may need to make sure something else is set correctly as well. The "one hour off" is actually a clue that your time zone is set incorrectly.
And, of course, where that gets adjusted depends on what program or service you're using.
Let's look at a couple of common situations...
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First, as you point out, your computers time and date must be correct. That's easy to adjust: just double click on the clock in your task bar and you'll get the Date and Time Properties dialog where you can adjust the date and the time:

Notice the "Time Zone" tab? Click on that and make sure your time zone is correctly selected:

Finally, go ahead and click on the tab labeled Internet Time:

Most of the time the default settings are correct, but make sure that Automatically synchronize... is checked to allow Windows to synchronize your clock with an appropriate time server. If your clock "drifts", as some do, this will help keep it accurate.
The preceding steps should correct any time errors in an email client you run on your machine. Programs like Outlook, Outlook Express, Thunderbird, and others all use Windows to determine the time, date, and time zone.
If you're using a web service such as Hotmail, though, you're not quite done.
Hotmail, GMail, Yahoo!, and other web-based services usually ask you for your time zone when you sign up. If you ignore that, get it wrong, or move to a different time zone, you'll need to change the setting in order for the time stamps of your emails to be correct.
For example, once you've logged into Hotmail, click on the Options button in the upper right:

Then click on Personal on the left, for Personal Options, and then click on My Profile, which is described: "Change your name, location, and other personal information."
As I write this, Microsoft is transitioning to "Windows Live" for account management, so the resulting page will be a Windows Live branded page:

If you scroll down that page, you'll find a setting beneath your location where you can specify your time zone:

Press Save, and it's updated.
Services other than Hotmail have similar settings in profile, user account, or personal information settings. Regardless of which service you use, the time zone must be set properly for your email to be timestamped correctly.
Related:
Ask Leo! - Why does email take so long to be delivered sometimes?
Ask Leo! - How do I resolve my MSN Hotmail sign in problems?
Article C2871 - December 14, 2006
For Yahoo email incorrect time stamp: To fix time zone go to Account Info. Then to Member Info. Under Member details it asks for your time zone. I will fix it immediately!!!
Posted by: Karla at March 4, 2009 12:01 PMThank you Karla, sometime on March 4th, yahoo reset my internal time clock to US pacific time when I am on central. This article was really helpful and fixed the problem! now on to resending this morning's emails!
Posted by: j at March 5, 2009 5:27 AMTime on PC "drifts" exactly 6 minutes. If I sync using MS, 6 minutes off. If I use the other time server, will fix the time.
Posted by: Clifford at March 8, 2009 8:23 AMWhat's going on? How come MS time server off by 6 minutes?
Thanks
My att email is fine, my computer time & time zone are fine, but my new q.com (qwest) email is 5 hours off.The tabs that you show aren't there to click(no options button, no personal button & no profile button or anything similar).How do I fix it?
Posted by: Wendy at March 22, 2009 3:31 PMThank you for this posting. I have been going nuts trying to figure out how my pc time was off by exactly 3 hours every time I have to reset it. After a hard drive crash and replacement I had to reset everything and that was the little wonder I missed.
Posted by: Laurie at March 23, 2009 11:48 AMmy time stamp in my hotmail is still wrong. been a hotmail user since 1997 but i think ever since they moved it to windows live, the time stamp got messed up with. i've gone to the manage my account section and chose the right location (manila) but there were only these choices: manila in the USA, Mexico and plain manila. the profile recognizes that i'm from the philippines, but still my time stamp is wrong :o( hope you can help (bec. microsoft help isn't really helping! :o( ) thanks!
Posted by: jemps at May 12, 2009 6:16 AMcorrect your computer timing settings:
time zone
time update
current time
if still the problem is not alleivated then change the time zone settings in your mail account info.that would certainly solve your problem.
Posted by: anirudh gupta at June 4, 2009 1:42 AMHello, I currently am running a 16 bit application on Windows XP. When I intially start the 16 bit program the time is displayed properly. When I login into the server the time on my application changes to 3 hours behind..exactly. Any thoughts....
Posted by: Paul at June 10, 2009 10:59 AMThank you, this fixed a problem I've been having for years. This corrected the time stamps on my incoming and outgoing emails through hotmail's web access.
Posted by: Marty at June 12, 2009 2:29 PMMy settings are all correct like stated above in he directions, however my email is still 1 hour behind. This is an AOL email address. Any help would be great.
Posted by: Sheryl at July 3, 2009 12:56 PM