Mistakes on tax returns aren’t at all unusual. Even tax preparers can goof. In fact, in 2019 the IRS reported that more than 1.8 million math errors were discovered on individual tax returns. Every year, taxpayers find themselves thinking, "My tax preparer made a mistake; what can I do?"
If you find something wrong on your tax return, you can fix it, although you are liable for any extra taxes due and you might have to ante up a late payment penalty. The good news is that fixing tax return errors is pretty straightforward and can save you money, compared to the IRS finding the problem after you do. In fact, your tax preparer may cover the penalties if the error was their fault.
When Tax Preparers Mess Up
You might have your tax return prepared by a certified public accountant or other professional. If there’s something wrong with the return, you are still responsible for any additional taxes and penalties. Tax preparers often will pay penalties that result from a mistake they made (called indemnity payments), although they won’t pay any additional taxes.
Assuming responsibility for penalties on the part of tax preparers isn’t automatic. Before you choose a tax preparer, review your tax return preparation agreement and find out what the policy is.
Read More: Tax Preparer vs. CPA
Fixing Tax Preparer Errors
If you find something wrong with your tax return and it means you owe more, the IRS says to file an amended return and pay as soon as you can to keep penalties to a minimum (generally, however, you must file it within three years from the date you filed the original return, or within two years after you paid your taxes, whichever is later). If you file your taxes early and then file your amendment prior to the tax return due date, you can avoid interest and penalties on any taxes you may owe after the amendment.
On the other hand, you might find that amending will get you some money back. If you are waiting on a refund based on the original return and you know the amendment will also result in a refund, hold off submitting the amended return until the refund check arrives. Don’t put off filing an amended return for a refund too long, though. You can only amend to get a refund for three years after the original tax return due date.
Finding the Right Amendment Forms
You don’t use the same form for an amended return that you used when you originally filed. You can file an IRS Form 1040X, “Amended U.S. Individual Tax Return.” The form is available on the IRS website and includes three columns: Column A is where you list the figures showing on the current return; Column C is where you show the corrected figures; and Column B is the difference between the figures in A and C.
The back of the form (or the second page, if you're preparing it on or printing it from your computer) includes space for an explanation of the changes, if any. You can use the Form 1040X not only to correct your tax returns, but also to make certain elections, change amounts previously adjusted, or make a claim for a carryback due to a loss or unused credit.
If additional forms or schedules have to be revised, attach corrected versions to the 1040X. When you are amending because you owe additional taxes, send payment with the amended return.
Mistakes That Don't Require Amendment
When you do your taxes, you might forget to include some income, overlook a deduction or miss claiming a tax credit. These types of mistakes are likely to change the amount of tax you thought you owed Uncle Sam. This means you either owe the Internal Revenue Service more money, or you are entitled to a bigger refund. You’ll need to file an amended return to fix these problems.
Not every tax return mistake requires amending, however. If you simply got the math wrong or forgot to attach a schedule or form, the IRS will not require you to submit an amended return. The IRS computers correct mathematical errors. There may be no need to provide a missing form. If any action is required, the IRS will notify you.
- IRS: Math Errors on Individual Income Tax Returns, by Type of Error and Calendar Year
- IRS: About Form 1040-X, Amended U.S. Individual Income Tax Return
- IRS: Summary of Preparer Penalties under Title 26
- Internal Revenue Service. "Instructions to Form 1040X," Page 3. Accessed Jan. 6, 2020.
- Internal Revenue Service. "Instructions for Form 1040X," Pages 7-8. Accessed Jan. 6, 2020.
- Internal Revenue Service. "Instructions for Form 1040X," Pages 8-9. Accessed Jan. 6, 2020.
- Internal Revenue Service. "Form 1040X," Pages 1-2. Accessed Jan. 10, 2020.
- Internal Revenue Service. "Amended Returns." Accessed Jan. 10, 2020.
- IRS. "IRS announces Form 1040-X electronic filing options coming this summer; major milestone reached for electronic returns." Accessed July 9 2020.
- Internal Revenue Service. "Instructions for Form 1040X," Page 7. Accessed Jan. 6, 2020.
- Internal Revenue Service. "Instructions for Form 1040X," Page 3. Accessed Jan. 6, 2020.
Based in Atlanta, Georgia, W D Adkins has been writing professionally since 2008. He writes about business, personal finance and careers. Adkins holds master's degrees in history and sociology from Georgia State University. He became a member of the Society of Professional Journalists in 2009.