Made a Mistake? How You Can Correct Your Tax Return

On second thought, maybe in retrospect, missed this, found that...

Mistakes are frequently made on tax return filings. These can sometimes result in more tax owed or bigger returns. Fortunately, the IRS provides individual taxpayers a tool to amend their tax filing. A 1040X gives taxpayers a second chance at getting it right.

Quick Catch Can Preclude Significant Tax Liability

Not every error requires filing a Form 1040X. For instance, you are not required to do this with simple addition or subtraction mistakes because the IRS should detect such errors and adjust returns automatically.

However, for bigger mistakes, such as, not including income, correcting the mistake through a Form 1040X could preempt incurring a significant tax liability.

In most cases, the IRS may not penalize for an honest, self-reported mistake, but it will levy interest on any outstanding amount owed if it can’t be paid immediately. Therefore, the sooner errors are re-mediated, the less costly they may become.

Mistakes can be corrected up to three years after the original return's filing date. There is an area on the back of the form for filers to explain their reasons for the revision. Keep in mind, any change to a federal tax return may impact a state return as well.

According to the IRS, these are the most common corrections addressed on Form 1040X:

  • Revising number of exemptions: This is most often related to mistakes regarding improperly claiming dependents, which can sometimes be confusing in the wake of a divorce or other life circumstance. Adding or subtracting personal exemptions to clarify confusion — and potential liability — can be a wise tactic.
  • Single to head-of-household status: This clarification of filing status may result in a significant deduction, especially for a custodial parent of children in a divorce settlement.
  • Married-filing-separately to married-filing-jointly status: This is a one-way street — a 1040X can revise filing status of married couples from separate to joint, but changing from joint to separate after the tax deadline is not permitted.

You Cannot file the Form 1040X Electronically

Because mistakes can be corrected dating back three years, a separate Form 1040X must be filed individually for each year amended and each mailed individually in a separate envelope. Unfortunately, at this time, this cannot be filed electronically, only via postal mail.

If you feel you need to file an amended tax return, you can find out more here

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