Tax time can be stressful, especially if you’re rushing to get everything together before the deadline. Ideally, you’ll submit your return on time and get your refund soon after without an issue. But if you do later discover you made a mistake, the IRS has a process in place to help you amend your tax return.
Common Income Tax Mistakes
Whether you’re using tax preparation software, having a professional handle things for you or manually completing the forms, errors are fairly common. But you can reduce your risks by going electronic and using e-file. The Internal Revenue Service estimates that paper returns have an error rate of 21 percent, compared to only 0.5 percent of electronic returns.
Before you file this year, check for these common tax return errors.
- Eliminating crucial information: Even something as simple as one incorrect digit in your Social Security number can delay your refund. Check to make sure you’ve completed every field, including address and ZIP code and your name. Also check the names and Social Security numbers for your spouse and anyone else listed on your return.
- Incorrect filing status: Double-check your filing status and number of dependents to make sure both are correct.
- Inaccurate income information: Review all the numbers you’ve listed and make sure they’re correct.
- Deductions and credits: Check these numbers carefully. If you’ve listed any negative amounts, make sure you’ve put brackets around those numbers. For those taking the standard deduction, make sure you’ve chosen the right one.
- Sign and date the return: This is an often-forgotten detail. Make sure both you and your spouse have signed and dated the return.
- Refund information: If you’re getting money back, check the direct deposit information for your bank.
- Attached forms: Make sure you attach all forms and schedules that you’ve completed with your return.
- Payment remittance: For those sending checks in for taxes owed, make sure “United States Treasury” is in the "To" field. In the memo section, write your name, address, Social Security number, tax form and tax year. Make sure your phone number is on the check, as well.
- Address and postage: If you’re mailing the form or any money you owe, make sure you’re sending it to the right address for your location. Also check to ensure you’ve used the correct postage.
The IRS has put a process in place to allow taxpayers to fix tax return errors. This is known as an amended return.
The IRS and Return Mistakes
No matter how careful you are, mistakes can and likely will happen. In many cases, the IRS will discover your mistake and send you a notice by mail describing the error with directions for correcting it. Obviously, this will delay processing your return, though, which will force you to wait for a refund.
If you owe money, that delay could cost you. There are penalties for late payments, and those penalties only increase as time goes on. For that reason, it’s better to take steps to fix the error as soon as you realize it’s occurred.
Read More: Penalties for a Mistake on Federal Taxes
How to Correct a Mistake
The IRS has put a process in place to allow taxpayers to fix tax return errors. This is known as an amended return. It’s a separate form, and the IRS uses it to update the information it has on file for you, adjusting your refund or tax debt accordingly.
To file an amended return, you’ll use Form 1040-X, Amended U.S. Individual Income Tax Return. Using this form, you can correct information on Form 1040, 1040-A, 1040-EZ, 1040-NR or 1040-NR EZ. Even after the filing deadline has passed, you can use Form 1040-X to repair previous errors.
Amend Your Return Electronically
One of the best things to happen to the federal tax return process occurred when the process shifted online. Using a variety of third-party solutions or the IRS’s own Free File, you can do everything online, with or without the help of a tax professional.
Online filing also now applies to amended tax returns. As long as the federal tax return you’re amending was for the 2019 tax year or later, you can file Form 1040-X online. Simply look for Form 1040-X in your favorite tax preparation solution.
Amend Your Return by Mail
In some cases, amending your income tax return electronically won’t be an option. You can’t file Form 1040-X for tax years before 2019, for instance, and you’ll need to have filed your original return electronically. If you filed a paper tax return, you’ll have to submit Form 1040-X on paper, as well. If your filing status or Social Security number was incorrect on the original form, you’ll also need to file by paper.
To file a paper 1040-X, download the latest form from the IRS website. If you can’t file electronically, use the mailing address on the form unless you’re filing in response to an IRS notice. In that case, use the address on the IRS notice when you send your form in.
What Happens After You File?
Whether you’ve filed your amended return using tax software or by mail, you can monitor the status of your return using the Where’s My Amended Return? tool. It takes approximately 16 weeks for the IRS to process an amended return and once it’s complete, you’ll receive a confirmation via mail.
The Where’s My Amended Return? tool is updated once a day, usually at the end of the day. If you’d prefer to check the status by phone, wait three weeks after you’ve sent the amended return and call 866-464-2050. Make sure you keep copies of both Form 1040-X and your original tax return in case you need to resend something.
Delays in Amended Tax Returns
The same errors that can delay an initial return can also come back to haunt you with an amended return. Math errors and omitted information can delay your amended return far longer than the estimated 16 weeks. You definitely won’t want to check in at the 20-week mark, only to find your return has been held up while the IRS seeks more information.
For best results, have a tax professional go over your amended return to make sure everything’s in order. But here’s a checklist of the most common mistakes on amended tax returns to help you double-check everything.
- Check to make sure every box is checked and every line that needs to be completed has been.
- Double-check your math.
- Make sure you’ve signed and dated the form. If you filed jointly, your spouse’s signature is also required.
- Double-check both your and your spouse’s Social Security numbers.
- Make sure all applicable forms are attached, including Form 8379, Injured Spouse Allocation if necessary.
- Check all mail you receive carefully to make sure you don’t miss a letter from the IRS requesting more information.
Payments on Amended Returns
Hopefully, your amended return will get you a refund. But in some cases, you may owe some additional tax. Maybe you crunched the numbers wrong or reported a tax deduction inaccurately. In that case, you’ll have to submit payment for the overdue taxes with your amended tax return.
To submit a payment to the IRS, you’ll use Form 1040-V Payment Voucher. If you want to mail your payment, you’ll print this voucher out and send it whether you’re mailing your amended return or you submitted it electronically. You can also pay any money you owe the IRS using the IRS online payment tool.
Mistakes on State Tax Returns
If you live in a state that has an income tax, you may find you’ve made a mistake on your state tax return. Each state has its own process for correcting your state tax return. Here’s the process for a few of the most populous states.
- California: Complete Schedule X and Form 540. You can submit either online or by mail.
- New York: Submit Form IT-201-X with all your changes. Make sure you attach any forms you submitted with your first tax return if they’re applicable to the changes you’re making. You can either file electronically or by mail.
- Pennsylvania: To amend your Pennsylvania tax return, you’ll file Schedule PA-40 X with the Pennsylvania Department of Revenue. In Section III, you’ll need to provide a description of the changes you’re making to your original form. You’ll have to include a PA-40, Pennsylvania Personal Income Tax Return with your amended return, noting that the PA-40 form is an amended tax return.
- Illinois: Illinois residents use Form IL-1040-X to amend their original 1040 with the state. You can pay any taxes owed electronically following the Form IL-1040-X instructions.
Time Limit for Amending Returns
You have three years to file an amended return with the IRS. That clock starts when you file your original tax return. However, if you paid a tax at a later date, you have only two years from the date the IRS marked that tax as paid. That means if you discover an error on your 2016 tax return, it’s too late to file an amended return.
The issue comes if you have an older tax liability that could trigger an audit. The IRS can only include the past three years in a federal income tax audit. However, if during the course of reviewing those three years, the IRS finds an error that tracks back to previous years, the agency can go back further. The IRS usually won’t go back more than six years.
Amendments for Multiple Years
It’s not unusual for taxpayers to discover they’ve made a mistake that applies to more than one tax year. In fact, often you’ll realize that your mistake applied to at least one prior year.
As long as it’s within the three-year cutoff, you can file amended returns for multiple years. Simply file one Form 1040x for each tax year you’re amending.
Amended Tax Return Penalties
If your amended tax return reveals that you owe some money, your next question may be how long you have to pay. The truth is, your payment was due on April 15 in the year you originally filed. But there’s an even higher penalty for errors discovered during the audit process, so you’re better off filing an amendment than taking the risk of the IRS finding it.
The penalty for failing to pay your taxes on time starts at five percent per month. You can dispute the charge, though, by calling 1-800-829-1040. If you can show you amended the return as soon as you realized the error, you may be in a better position to negotiate.
Amended Returns and Math Errors
Before sending an amended return for a math error, it’s important to note that the IRS typically catches these on its own. The agency has processes in place to verify figures on every income tax return that comes through its processing centers. If you’ve made such an error and you file an amended return, the IRS is directed to update the return based on the amended return without adjusting the math.
However, whether you file an amended return or not, the IRS will send you a notice when a math error is discovered. This notice will alert you to the error and ask you to take measures to correct it. If you’ve filed an amended return that didn’t address the math error in your notice, you’ll still be expected to take care of that as directed in the letter.
In some cases, the discovered error will affect your tax return. The notice often will let you know that you don’t have to take any further action. If you disagree with the findings of the IRS based on the letter you receive, you can contact them to register a dispute.
One of the best ways to avoid errors on your tax return is to work with a tax professional who guarantees accuracy. In that case, if you’re audited, the preparer will work with the IRS on your behalf. But you can never go wrong by double-checking your return before the tax deadline. If you catch errors in time, you could avoid costly penalties.
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Stephanie Faris has written about finance for entrepreneurs and marketing firms since 2013. She spent nearly a year as a ghostwriter for a credit card processing service and has ghostwritten about finance for numerous marketing firms and entrepreneurs. Her work has appeared on The Motley Fool, MoneyGeek, Ecommerce Insiders, GoBankingRates, and ThriveBy30.