What to Do if You’ve Made a Tax Error or Mistake

What to Do if You’ve Made a Tax Error or Mistake

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As the old adage goes, death and taxes are the only two certainties in life and you’re probably just as excited about one as you are about the other.

Whether or not your taxes are enjoyable, filing them incorrectly can cost you hundreds.

Don’t let one small tax error cost you big. Here, we’re breaking down everything you need to do if you find you’ve made a few critical tax mistakes on your returns.

How to Amend Your Tax Return

While doing your taxes feels more difficult than pulling teeth, the process for amending your tax returns is actually pretty straightforward.

To start, you’ll need the Form 1040X, Amended US Individual Income Tax Return. It contains three columns: A, B, and C.

In column A, you’ll need to enter the amounts you put into your original tax return so make sure you have those on hand. In column C, you’ll write the corrected numbers. Finally, in column B, you’ll write the net change between the two (the difference between the original and corrected amount).

Then, on the second page, write an explanation for each change. Make sure to be as detailed as possible.

If you need to amend for more than one year, you’ll need to include separate forms for each individual tax year you’re amending. Each of these must be mailed in a separate envelope.

You’ll also need to include a copy of the tax return you’re amending as well as any previously filed forms or schedules affected by your amendments. Arrange these documents in the order of the “Attachment Sequence No.” shown on the upper right corner of the form.

When to Amend Your Tax Return

In general, it’s a good idea to send amended tax returns as soon as you realize you made an error on your returns as these mistakes accrue interest and increasing penalties the longer it takes you to remedy them.

However, your Form 1040X must be filed after you’ve submitted your tax return. If you’re seeking a tax refund, the amendment must be filed within three years of the date you filed the erroneous return or two years after you paid the tax.

You also need to file corrected state returns, which should be done as quickly as possible to minimize your potential penalties and interest.

Either way, it takes the IRS up to 12 weeks to process amended tax returns. Use the Where’s My Amended Return tool to check on the status. Keep in mind that it takes at least three weeks for the amendment to appear in the IRS system.

Working Out Your Tax Error

If you’ve noticed a tax error, now is the time to act.

We offer a variety of tax and accounting services so that you can file your taxes the right way (or correct them if you got it wrong).

If you have questions about our available services, feel free to use our contact page to get in touch.

Parker Business Consulting & Accounting, P.C. is a unique firm with more than a combined 75 years of experience in private industry, coupled with a strong background in public accounting. This combination enables us to provide valuable assistance based on direct experience with many of the same issues faced by our clients.