In the weeks leading up to April 15, when taxpayers must file their taxes and pay them, millions of Americans are preparing their returns, checking their old tax forms, and figuring out if they deserve a refund or owe the Internal Revenue Service.

However, what happens if you realize you have made a mistake after you have filed your taxes? Maybe another tax form arrived in the mail after you filed everything with the IRS?

There's nothing to worry about. The IRS has dealt with this type of situation before and has solutions in place for you. 

You may be worried that you have made a mistake, but there's no need to worry excessively. Here are some steps you can take.

How Will I Know if There Was a Mistake on My Taxes?

A mistake on a tax return will most likely be caught by the IRS. The IRS's programs will almost certainly catch any mistakes or incorrect information you report when they cross-reference your tax return with other information.

However, the IRS doesn't catch every mistake, so you may not find out about errors unless you check your own taxes.

IRS Notification

The IRS automatically catches and corrects many minor errors, such as leaving off a zero. If the IRS finds a mistake, you will likely receive a letter in the mail notifying you of it.

You may face an audit if, however, your mistake is more serious, such as underreporting income. Audits usually begin with a letter asking for more information.

The IRS does not catch every mistake on a tax return. You should review your tax returns on your own or with the help of an accountant rather than relying on the IRS if you think you filed an erroneous return.

info icon Helpful Resource: What to do if you receive a letter from the IRS

Other Notification Options

Examining your own tax documents may reveal that you made a mistake before or after filing your taxes. The most common errors include forgetting to report income, reporting income on the incorrect line of the tax return, and failing to report deductions.

If you have a tax preparer, he or she might catch the error. Tax filing software can also catch some mistakes automatically, such as forgetting to sign the return or leaving required fields blank.

Will the IRS Catch If I Have Made a Mistake on My Taxes?

Most likely, the IRS will catch a mistake on a tax return. Computer programs and technology at the IRS enable it to cross-reference tax returns against data from other sources, such as employers.

Cross-referencing your tax returns with other information, the IRS' programs will almost certainly catch any errors or incorrect information reported on your tax return.

What should I do if I made a mistake on my tax return?

No matter what kind of mistake you made, it's important that you fix it.

If you wait too long, it becomes more difficult and time-consuming to fix the mistake. If the correction means you owe more taxes, the IRS charges interest and penalties until your account is paid in full. In other words, the longer you wait to fix a mistake, the more expensive it will be.

People often rush to submit their tax information during tax season, which can be stressful. Tax return mistakes can range from entering the wrong Social Security number to forgetting to sign it entirely.

Fixing errors during tax season isn't difficult - all you need is to know what went wrong and how to fix it.

How to Correct a Mistake on Your Tax Return

The worst does not happen if you file your taxes incorrectly. It's not too late to fix errors on your tax return, even if you've already filed.

In the event you made a mistake on your tax return, you need to contact the IRS to correct it. An amended return must be filed with the IRS to correct the error. Penalties and interest may be charged if you fail to correct the mistake. Alternatively, you can have a professional accountant or CPA prepare the amended return for you.

Correcting a previously filed 1040 will require Form 1040-X. You should use Form 1040-X for the year you need to change. Form 1040-X cannot be submitted electronically; amended returns must be mailed to the IRS.

example of irs form 1040 x for correcting tax returns

Refer to the Form 1040-X instructions for the address of your state's IRS Service Center where you will mail the amended return. If you are filing an amended return due to a notice from the IRS, the amended return needs to be sent to the address indicated on the notice, and it should reference the notice.

info icon Helpful Resource: How to Amend Your Tax Return

What are the most common tax mistakes?

Often, the tax filing season is a stressful period when people hurry to submit their information. People make mistakes all the time, from entering the wrong Social Security number to forgetting to sign the tax return. While tax season can be challenging, fixing errors isn't difficult. You just need to understand what went wrong and how to fix it.

Not Including Necessary Information

One of the most common mistakes people make when filing their taxes is omitting necessary information. Many filers forget to give their routing numbers for their bank accounts or make mistakes when listing their Social Security numbers.

While taxpayers who file their taxes electronically will likely be notified of their mistakes immediately, taxpayers who file their taxes on paper can expect their refunds to be delayed by six to eight weeks.

Using the Wrong Filing Status

Another mistake is using the wrong filing status. Even people who file their taxes as singles or married couples filing jointly often mark themselves as heads of household on the forms, a designation that usually only applies to people who support dependents.

info icon Helpful Resource: How to Choose the Right Tax Filing Status

Making Math Errors

In most cases, unless it happens regularly, accidentally writing down a deduction of $15,000 when you meant to write down $1,500 won't get you in trouble. You should always double-check your figures before filing your taxes. Making the mistake of adding instead of subtracting could drastically change your tax liability.

Miscalculating your income could have serious implications. By pointing out inconsistencies, tax software or a professional tax advisor can help you greatly. 

Unreported Income

There is a misconception that certain income doesn't need to be disclosed when filing taxes.

Even if you earned less than $400 from a contract or freelance work, you need to report it as income even if you are exempt from self-employment taxes.

Filing for an Extension and Not Paying Your Tax Bill

People often assume that they have more time to pay their taxes when they file an extension on their tax returns.

In reality, an extension only gives a person more time to file their tax return. IRS officials want their money by April 15, no matter what. According to the IRS, penalties for late tax payments typically range from 0.5% to 25% of an individual's unpaid taxes each month.

info icon Helpful Resource: How to File an Income Tax Extension

What Is The Penalty For An Incorrect Tax Return?

There is no specific penalty for filing an incorrect tax return. Nevertheless, you can be penalized if you file an incorrect return. When your mistake means that you need to pay more tax, more penalties will apply in proportion to the increase in tax. Alternatively, if your mistake resulted in you paying less tax, there would be no penalties associated with your corrected return.

Late Payment Penalties

When you underpay your taxes due to inaccurate information on your tax return, the IRS will assess you a late payment penalty of 0.5 percent of the overdue amount for every month that your payment is late. Parts of a month are counted as a full month for penalty purposes - one month plus one day late is counted as two months late. However, the maximum penalty is 25 percent of the overdue amount.

Negligence Penalties

When you make a particularly careless error on your tax return, disregard tax rules recklessly, or understate your tax liability substantially, you may be penalized for negligence. 

However, the negligence penalty will only be imposed if the understatement exceeds $5,000 or 10 percent of the total amount you owe. In addition to other penalties that may apply, this penalty amounts to 20 percent of the overdue amount.

Fraud Penalties

If you intentionally deceive the IRS, you are subject to civil tax fraud penalties. In addition to any other penalties, the IRS can fine you 75% of whatever underpayment was due to fraud if it finds it. In general, fraud involves a false statement or an attempt to conceal critical information.

Fraud can be committed by failing to report income from abroad because you thought the IRS would never discover it.

Tax Evasion

Similarly to civil fraud, tax evasion requires a deliberate attempt at deception. Both civil fraud and tax evasion can be prosecuted.

You might be charged with tax evasion if you deliberately overstate your deductions, for example. Tax evasion carries a maximum penalty of five years in prison and a fine of $250,000.

Can I Go To Jail For Filing My Taxes Incorrectly?

Making a mistake or filing your tax return incorrectly cannot get you into jail. However, if your taxes are wrong by design, and you omit items that you should include, the IRS may view your actions as fraudulent, and you may be charged criminally.

Criminal action is determined by the intention of the taxpayer. It is not unlawful to make a mistake and correct it.

Negligence doesn’t equal fraud

The IRS does not consider accidental mistakes to be fraud. In order to charge you with a crime, the IRS must prove your intent.

You can, however, lose your money in the event of a mistake, at best getting a refund, and at worst, getting a fine. The IRS may slap penalties on you, and you could be blacklisted for future returns. Using a software or professional tax preparer is the best option if you are doing your own taxes this year.

You can also contact the IRS' Taxpayer Advocate Services. It is their job to make sure you don't make any errors.

Avoiding Mistakes on Your Tax Return

You can lose money if you make mistakes on your tax return. The Internal Revenue Service (IRS) may audit you or you could miss out on a tax refund, owe more taxes, plus interest and penalties. Avoiding errors on your return is the best defense against these results.

You can reduce the risk of making an error by keeping all of your tax documents in one place. This includes receipts, bills, earnings statements, and W-2s. Try keeping a deduction log instead of scanning your bank account for deduction potential if you have a lot of deductions. You should also report income for which you did not receive a W2, such as freelance or hobbyist income.

The stress of trying to resolve a tax error can be avoided by having an accountant double-check your work.

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