Ask a CPA: 'How Do I Fix a Mistake on My Already-Filed Tax Return?'

04/01/2015 07:13 pm ET | Updated Jun 01, 2015

In our new "Ask a CPA" Q&A series, we're ceding the floor to a Certified Public Accountant, who will address some of the trickiest tax topics out there.

Today, Paula Marie Bruce, a CPA in Sausalito, Calif., explains how (and why) you should go about fixing an error on your tax return--as soon as you notice it.

"Navigating tax season can be confusing, especially if you're preparing your return by yourself.

Since most people aren't tax experts, it's all too easy to make a mistake--whether it's forgetting to report income from your side gig, or misunderstanding which deductions you're eligible for and how to apply them.

Fortunately, you can catch careless flubs by reviewing your return before you drop it in the mailbox--but what if you don't realize you've made an error until later?

That's the conundrum behind the question many panicked people want to know:


Why So Many People Ask This Question The I.R.S. has a reputation for being fairly punitive, handing down heavy fines, audits and, in severe situations, prison sentences--which can be intimidating.

That leaves some people seeking the fastest way to fix a mistake before it causes a bigger issue, and others wondering if they should try to hide the error instead.

What I Tell Them Never let your fear prevent you from fixing a mistake. Although it's possible that flagging an issue could cause the I.R.S. to take a closer look at your 1040--and potentially open an audit--the penalties for lying or committing fraud are significantly more severe.

If your mistake was a simple math error, don't sweat it--the I.R.S. will probably fix this for you. But if there's a more substantial issue--like you claimed a credit you weren't owed--it's time to file a Form 1040X.

You can complete it yourself, although I typically recommend working with a tax professional, because it can be tricky. For instance, if your mistake affects your tax liability at both the state and federal level--like an incorrect filing status--you may need to fill out an additional state form.

The next step is to complete an amended version of any supporting forms, like a W-2, that applies to your mistake. You should write "as amended" in the top right corner of the first page in pen. After that, fill out an entirely new, regular 1040 and write "as amended" at the top, as well.

Finally, if possible, include a copy of the original return that has the mistake on it, so it's easy for the I.R.S. to compare the old and new documents. If you don't properly package your materials, it could result in a processing delay.

Although I recommend doing this as soon as you notice the mistake, there is a generous grace period. To claim a refund, you must file your 1040X within three years from the date you filed the original return.

Bottom Line Don't let a mistake go unfixed on your return. Even though it can be a pain to walk through these steps, you don't want a simple error to come back to bite you later."

This post originally appeared on LearnVest.

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