How To Fix Tax Mistakes By Filing An Amended Tax Return

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There are only two certainties in life, as the old adage goes: death and taxes.

But what happens when you make a mistake on those taxes, and you realize it after you’ve already sent them in?

While death and taxes are often said to be life’s only sure things, there is one other: that humans make mistakes. The IRS knows this and is prepared to help you deal with your error without taking too much of your time.

Thankfully, taxpayers are able to file an amended tax return to repair accidental blunders they made on their first attempt at filing.

In this article, we’ll go over how to correct an error you may have made on your tax return by filing an amended tax return.

Read on for helpful information that can bail you out of any trouble you might get into with the IRS for your misprints.

What Happens If the IRS Realizes Your Mistake First?

In 2018, the IRS announced a major overhaul of tax withholding tables, which caused around 80% of people to get smaller refunds than they would have received had they corrected their mistake.

In some cases, if the mistake is minuscule, the IRS may never reach out to you. You’ll go about the rest of your life never knowing that you could have gotten a bigger tax refund.

If the mistake is a bigger one, the IRS will correct it for you. You’ll likely receive a letter in the mail with an adjusted amount of taxes due. If you’re lucky, the mistake might have worked in your favor, and the IRS might owe you money. In that case, they’ll work out a way to pay you the refund owed.

When Do You Let the IRS Correct Your Mistake and When Do You Take Initiative?

Depending on the mistake, it is often less of a hassle to have the IRS correct the form for you. If you made a simple calculation error, for example, printing out the form and mailing it back might be more trouble than it’s worth.

Some mistakes, however, the IRS won’t be able to correct without additional information. If, for example, you checked the wrong marital status, the IRS usually won’t correct this for you. But, as a taxpayer, you know your marital status affects how you pay taxes.

Or if you’re a freelancer and you realize you forgot to include one of your jobs on the tax form, you’ll need to correct this yourself. Depending on how your client reported the wages on their own taxes, the IRS may not be aware of this overlooked gig. Therefore, it is worth your time to correct the mistake.

The other important thing to remember is that the IRS usually audits returns from the past three years only. But, if you made a mistake in the past financial year and the IRS catches you, you’ll pay penalties going all the way back to the initial mistake.

In that case, it’s easier to mail in an amended return, as it can save you money in the long run.

Correcting Your Mistake: Navigating the IRS Website

If you have realized you’ve made a mistake the IRS can’t fix, or you want to report it yourself, the process is relatively simple. Go to the IRS’ webpage and download the 1040X form. This is clearly labeled as the Amended Tax Return Form and exists solely for people who have made an error on their taxes that they’ve already turned in.

You can fill out the form using your computer, but you can’t file it electronically. Instead, you’ll have to mail it in the old-fashioned way.

How to Fill Out the 1040X Form

The form itself can be a little confusing, even if it looks deceptively simple. It’s only two pages long, and it only addresses your errors. As such, you don’t need to fill out a 1040 all over again, as you did that when you filed your taxes originally.

You’ll need the tax return you messed up on in order to accurately fill out the 1040X.

In Column A, you’ll state what you stated on your first tax return, including the errors. In Column B, you take the opportunity to correct the mistake. Column C is the difference between the two, indicating how much you either overpaid or underpaid.

While that seems simple enough, you have to remember that if some things change, like your marital status, it will throw your entire tax return out of whack. This means you may also have to account for changes in your tax deductions, which may be more or less than your original return.

Because of this, the simple-looking 1040X can suddenly become very complex and overwhelming. If you’re completely lost after making the changes, it’s worth calling up an accountant to try and rectify it. And if you do find yourself in trouble with the IRS and unable to fix it, a tax attorney may be able to help.

Filing an Amended Tax Return: It Doesn’t Have to Be Stressful

Many people can start filing an amended tax return and complete it without needing help from anyone else. But, as we mentioned in the section above, it can sometimes get frustrating and confusing.

That’s why Silver Tax Group is there. If you’re a business or a sole proprietor, we can help you keep your finances in check even when it isn’t the tax season. With STG on your side, you won’t find yourself in the situation where you need an Amended Tax Return because you’ll already be on top of your taxes.

Contact us to discuss what we can do for you.

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