Mistake on Your Tax Return? Now What?

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April 16, 2015 by Lisa Brammer

Tax-filing season is a stressful and confusing time for a lot of people. If you are like me, you feel a sense of accomplishment and relief when your tax return is finally completed and sent off to the IRS. But what do you do if you realize you made a mistake and the tax return you sent was incorrect?

Don’t feel bad, it’s actually a fairly common occurrence and no wonder. According to Wolters Kluwer, CCH; global provider of tax, accounting, and audit information, there are over 73,954 pages explaining the U.S. federal tax code!

If the mistake you discover is a math error or if you forgot to send in a form such as your W-2 or schedules, the IRS says not to worry about it. You do not need to send in an amended return. They will catch the math error and send you a request for any missing forms. However, if the mistake you made is regarding your filing status, number of dependents, total income, tax deductions, or if tax credits were reported incorrectly or omitted, an amended tax return needs to be filed.

When filing an amended return do not use the standard Form 1040, that will just confuse the IRS—and no one wants that. Use the Form 1040X (Amended U.S. Individual Income Tax Return) when filing your amended return and mail it in. You cannot e-file the Form 1040X.

Don’t let the thought of filing an amended tax return scare you. The 1040X is actually fairly straightforward. It has three columns. Column A shows the figures from your original return, column B shows the changes you are making, and column C shows the corrected amounts. There is also a place on the back where you can provide, if necessary, an explanation of the changes.

If you are expecting an additional refund after filing the amended return, the IRS says to wait until you have received your original refund before filing the Form 1040X, but you can go ahead and cash your refund check while waiting for your additional refund. And since normal processing time on an amended return is 8-12 weeks, you are going to have to wait awhile.

Typically, you have 3 years from the date you filed your original tax return or 2 years from the date you paid the tax—whichever is later—to claim your refund.

If your amended tax return indicates you owe additional money, file and pay the additional tax as soon as possible to limit interest and penalty charges. If there is a reasonable explanation as to why you are late paying the additional tax, make sure you fill out the area on the back of Form 1040X indicating why you are late. The IRS may forgive some of the penalties.

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