How to Fix a Mistake on Your Taxes

With all of the forms, and papers, and numbers, it’s very easy to make a mistake on your income tax return – it happens all the time. Sometimes it’s a missed signature, sometimes it’s a miscalculated tax credit, and still other times it’s a number typed in wrong.

In the best circumstance, you catch the mistake before the IRS does, and correct it on your own. If the IRS finds an error, they’ll contact you – almost always by regular U.S. mail – and give you a chance to respond.

Whichever the case, the most important thing to do is act fast. Do not ignore official communications from the IRS. As long as you respond to their request, even if you disagree with them, the situation can be resolved without any drama.

Professional tax preparers make mistakes on clients’ tax returns much more often than most people realize.

When the IRS Catches the Mistake

Most mistakes the IRS catches can be easily fixed – they’re usually mismatches between an official document (like a W-2) and what you’ve reported on your tax return. When they catch a reporting error, you’ll get a straightforward notice from the agency, spelling out where you went wrong, and how much more you owe…or how much more you’ll be getting back. This often comes up before the IRS has fully processed your tax return – basically, they’re giving you a chance to fix it before they finalize their records.

When the IRS catches a mistake, they’ll send you a standard notice. All IRS notices and letters have specific numbers – you can find the number for your notice at the top right corner of the page. You’ll also see contact information right there, in case you have any questions. The notice will tell you three basic things:

  1. What the IRS is changing or needs more information about on your tax return
  2. Why they’re making the change or asking for more information
  3. Where and by when to send your reply (if they need a reply – they don’t always)

If you agree with their correction, simply follow the instructions in the notice. When it calls for a payment, make that payment right away so you don’t end up paying more in interest and penalties.

If you disagree with their change, let them know immediately. Gather up your supporting documentation, make copies – NEVER send original documents to the IRS – and send it to them by mail or fax (that contact information should be included in your notice). Make sure you refer to the notice you received by its number, and include a copy of that notice in your response. Keep copies of everything you send them, or they send you.

When You Realize There’s a Mistake

It happens all the time: You realize you left something off your tax return. Or you get a corrected statement from an income source (like a bank, broker, or employer). Or maybe you find a pile of receipts that never got deducted. Whatever the reason, you figured it out after you filed your tax return.

Don’t worry. There are very simple solutions. The right fix really depends on the timing.

If you realize your tax return is wrong before the filing due date, all you have to do is file a new tax return with the correct information. The IRS counts the last return you’ve filed as the right one.

If you notice the error after the filing due date, you can file an amended return on IRS Form 1040X to correct the error. The sooner you fix the mistake, the better, especially if you end up owing some money: The IRS charges interest (and possibly penalties) from the original due date of the tax return on any extra money that you owe.

Whatever the mistake is, and whoever catches it, you can easily correct your tax return with very little effort. As long as you act fast, you’ll minimize any potential interest and penalties.

And if you have any questions, please ask – I’ll respond as soon as possible.

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