Mistakes do happen, even on tax returns. But what happens when you make an error on your tax return? How do you rectify the problem? If you're not sure, you'll be relieved to know that it isn't as hard as you think it might be. This means you don't need to panic and think that the IRS is going to come after you. Making a mistake on your return doesn't mean you will end up getting hit with an audit. If you know you made a mistake, you can usually fix the problem quite easily.
Common errors
Math errors tend to dominate the list of errors the IRS sees on tax returns. Fortunately, those issues are being reduced due to the fact that electronic filing has some built in safeguards. But that still doesn't mean that an individual, or even an accountant, won't input a number wrong and throw all of the figures on the tax return off. A taxpayer may still find that they owe more or less tax based on the error.
Other errors include entering the social security number wrong, leaving off information, checking the wrong box when declaring filing status, forgetting a W-2, not entering interest income, not taking all of the proper deductions, or even claiming too many deductions. The list goes on and on. Some errors are more common than others, but each area of a tax return is subject to a variety of mistakes.
Simple fixes
The good news is a math error is something that the IRS can fix for you. They double-check your math anyway to make sure you are getting the proper refund or to insure you are paying them the correct amount. If you forget to send certain forms to the IRS, you don't have to worry about that either. If they need them, they will request them from you and all you will have to do is mail the forms to the IRS.
If your errors go further than this, such as those discussed above in the common errors paragraph, you may need to file an amended return.
An amended return is filed by filling out IRS Form 1040x. Amended forms cannot be filed electronically. You must mail your amended return to the IRS. Some people may prefer to have a tax preparer or tax professional file the amended return for them. Hiring a professional may give some a sense of comfort since the professional is familiar with the Form 1040x and the process of filing it.
This year, there is another reason why you may want to amend your return. If you bought a new home in 2009 and have already filed your 2008 return, you may file an amended return now to take advantage of the New Homebuyer's Credit. You can claim the first time homebuyer credit, which is $8,000 that does not have to be repaid. It is not like the previous $7,500 that more or less acted as an interest-free loan from the IRS and needed to be repaid. In order to take advantage of the 2009 credit before filing your 2009 tax return, you can amend your return to get the tax credit, you may amend the 2008 tax return and have a refund check mailed to you from the IRS.
You can now breathe a sigh of relief. You do not need to be in the doghouse over a mistake on your tax return. Although the IRS has very stringent rules, it is important to realize they understand people make mistakes. In most cases, the IRS will work with you to resolve any issues created by an error on your tax return. You just have to show a willingness to work with them first so that your tax issues can be resolved.
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