What Happens If I Make a Mistake on My Taxes?

By Robert Lear posted 07-08-2020 02:12 PM


Filing season is often a stressful time for taxpayers and it is easy for mistakes to happen. Perhaps this is as simple as receiving another tax document after you file your return. Most small issues are easy to resolve and you don’t need to lose any sleep over them. Here’s what to do if you discover you made a mistake on your taxes. 

Common tax mistakes

One common mistake is not to include certain necessary information. If you’re filing your return electronically, you will likely be notified right away if you make a mistake such as leaving out information. If you make a mistake while filing on paper, this could delay the time it takes you to get a refund if you’re entitled to one. Fortress tax relief provides IRS resolution services and will intervene with the taxing authorities on your behalf. 

Another common mistake is to use the wrong filing status. Married couples filing jointly or people who are technically single filers will often file as head of household on returns. This designation typically only applies to single people who support dependents. 

Taxpayers may request an extension and assume it gives them more time to pay their taxes. In fact, it only allows more time to file a return and penalties for late payment are typically 0.5% of the unpaid taxes for each month. 

If you make an error that causes you to underpay on your taxes, this may result in a penalty. For example, if you claim a head of household status incorrectly, this gives you more benefits and you could end up paying less than you actually owe on taxes. 

What if I make a small error on my return?

If you realize you made a mistake to do with math, the IRS will automatically catch and fix any simple addition or subtraction errors. If you’ve forgotten to send in a document, the IRS will usually write to you and request it. 

If your issue is a small one that is not automatically corrected when going through the e-filing process, it is best to wait until the initial return is processed. Most returns are usually processed within 21 days. You can see if the IRS has corrected the error or supply more information if it’s requested. 

What if I make a more significant error? 

If your error means you owe more to the IRS than you reported on your return, the process can be more difficult. There is an interactive tax questionnaire on the IRS website to help you find out whether you should file an amended return. You will have to use Form 1040X to do so. 

Some of the errors you could use this form to correct include failing to report some of your income, using the wrong status or claiming an incorrect deduction. 

If you forgot to report some income, you might have to file an amended return and you will have to pay the taxes on that unreported income before the deadline or you will face a late filing penalty and owe interest on the outstanding balance. 

Form 1040X can’t be submitted electronically and you will have to mail it to the address listed in the instructions. The deadline to file your amended return is three years from when you filed your original return. 

If the IRS catches the mistake first and you receive a notice about it, it may be possible to work out the discrepancies without having to prepare an amended return. If you end up having to pay more, you can agree with the notice and pay in response to it rather than filing an amended return.