You promised yourself back in January that you wouldn’t procrastinate on your tax return this year. It would be finished and filed by the middle of March, at the latest. But, sure enough, you found yourself scrambling on April 14th to round up all of your tax forms and enter them into TurboTax. And, as usual, you succeed! You congratulate yourself on a job well done and bid the IRS farewell until next year.
Until a few days later, that is, when you come across what appears to be a tax form. Uh-oh, you say. I think I forgot that one. What do I do now? Your mind races… Is the IRS going to raid my house? Am I headed for a prison term? I wouldn’t last a day in there!
First of all, relax. While in a perfect world all tax returns would be right the first time, mistakes happen. Whether it’s a forgotten form, a typo, or a misunderstanding of tax law, the IRS knows that people make mistakes. In order to correct these mistakes, the IRS provides Form 1040X, specifically designed for amending individual tax returns that have already been filed.
If you realize that you made a material error on your return, your best bet is typically to file an amended return. Amended returns aren’t only for the benefit of Uncle Sam, either. If you forgot to include a deduction, double counted income, or otherwise calculated an overly large tax liability, you can amend to receive a refund of the incorrect additional tax.
Amended returns can be prepared using most of the big-name software programs such as TurboTax, by your friendly neighborhood CPA or other tax professional, or even the old fashioned way with paper and pencil for all of you DIY’ers out there. You can read up on all the details for filing an amended return on the IRS website. If you do choose to file a 1040X without the assistance of a tax professional, make sure you do your homework. You don’t want to be amending your amended return later!
By Austin Bradley, CPA