By Jonnelle Marte
So you made the April 15 th deadline but realized that in the rush to file, you got something wrong. What now?
Tax pros say you should come clean about mistakes on your tax return as soon as possible, but exactly how you do so depends on the mistake. In fact, not all errors require filing an amended return, the Internal Revenue Service says.
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For instance, people who realize they got their math wrong or who forgot to attach a form should hold off before amending their returns because the agency has others mechanisms in place to spot those mistakes. Chances are those taxpayers will already be getting a letter from the IRS, since the agency scans all returns for math mistakes and missing forms during processing. “The key is there is already a process for handling that,” says Eric Smith, a spokesman for the IRS. “And you don’t need to go through the extra trouble of filing an amended return.”
Those taxpayers who misreported their income, or made any other mistakes that might change how much they owe should file amended returns, says Benson Goldstein, senior technical manager for the American Institute of Certified Public Accountants. That includes people who found a forgotten 1099 form, or who need to change their filing status, deductions or credits. The IRS has matching software to help it spot unreported income, and people who forget to include all 1099s, could get flagged for an audit.
In many cases, taxpayers may be realizing they forgot to claim a deduction they didn’t know was available to them, or on the flip side, claimed a credit
or deduction they didn’t technically qualify for. Most taxpayers file amended returns in an effort to get bigger refunds, says Goldstein.
If you think you are due a larger refund, the IRS says you should wait until you receive your first refund check before you file the amended return. (And it’s okay to cash that check.)
But if you end up owing taxes after the change, expect to pay interest and penalty charges, according to the IRS.
Taxpayers generally have three years from the date a return was due to file a Form 1040X. (That means the deadline for amending a 2012 return is April 15, 2016.) Unlike regular tax returns, amended returns must be filed by mail. And if you caught a mistake for multiple years, the IRS requires that each amended return be filed in a separate envelope. They normally take 8 to 12 weeks to process, and taxpayers can check the status of their returns using the “Where’s My Amended Return?” tool offered online by the IRS.
Keep in mind that a change in your federal tax return could impact your state tax bill, so contact your state tax agency about correcting your local return.
What if the IRS never did catch your glaring math error? It may pay to come clean if the mistake impacts how much you owe in taxes, says Goldstein. The IRS has three years to come after you for taxes owed, and longer if it suspects that fraud was involved, he says. You want to show there weren’t any malicious intentions, he says.
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