Oops! What if you make a mistake on your tax return?

Posted on May 21, 2010

What should you do if you find that you made a mistake on your tax return? Perhaps you find that you missed a big deduction. Perhaps you receive a late notice of income you earned. Or perhaps you should have itemized instead of taking the standard deduction. The answer is not to panic. Chances are you still have plenty of time to amend your return.

 The general rule is that you have three years to amend a personal or business return. Special rules may apply if you paid your taxes late, or are claiming certain business losses or carrybacks. You may have as long as seven years if you are filing to claim a loss on a worthless security.

 Many amended returns are filed each year. Form 1040X is used to show the items of income or deductions that you want to change or the different elections you want to make. A separate form must be filed for each previous year you want to change. You’ll have to file a paper copy to amend your return, even if you originally filed electronically or by telephone. If you want to change a corporate return, you file a Form 1120X, but the procedures are similar.

 If you owe additional tax because of the change, you should send a check at the time you file your amended return. The IRS will let you know if you owe additional interest or penalties.

 Please contact our office if you have questions about an earlier return. We can let you know whether you need to file an amendment and help you with any of the necessary paperwork.