It is common for taxpayers to misinterpret the tax laws or commit a calculation error and put an incorrect entry into their tax form. Many federal income tax filings contain errors, whether the person filled it electronically or submitted a form! That is why the Internal Revenue Service has made it possible for them to fix these errors later; however, error correction can occasionally result in a penalty in certain circumstances.
If you paid extra tax, after error correction, you will receive a refund, and if you paid less tax than you owe, you need to pay the unpaid amount. Remember, before you make error corrections, you must be sure that your new calculations are correct! If you have doubts, getting help from professionals like an accountant in Bellevue, WA, is best to avoid further mistakes.
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Tax Return Errors Can Be Fixed
Incorrect income, deductions, or filing status can all be corrected on an Internal Revenue Service Form named 1040X, accessible on the IRS website. The form is sometimes called the Amended U.S. Individual Tax Return, and you can use it to correct 1040 and 1040NR. Requests can be made online or on paper. They should be delivered to your IRS service center for processing, but remember to include copies of any updated information and any missing Form W-2s before submitting them to your service center.
To get a refund, you must submit this form within three years of the date of your initial return or two years of the date of your tax payment, whichever comes first, and if you are requesting a refund, wait until you have already received the due refund of the current year. The status of your modified return can now be checked online or by calling a toll-free number provided by the IRS.
Is It Necessary to Correct Every Mistake?
No, the good news is that fixing a mistake you made does not necessarily need filing an amended return because the IRS will fix any numerical errors you make. The IRS will contact you if they need help with your return and request that you submit any necessary IRS forms or details you may have overlooked with your filed return. However, these are usually minor errors. Still, if you reported multiple inaccurate information about your income, deductions, credits, or filing status, the IRS advises you to submit an amended return.
In certain situations, the IRS will already be aware of your error, so it’s best to have it fixed before the agency takes any action against you. For instance, if you under-report your income from work, the IRS will identify the error when it initially processes your return because it will see that your claimed income differs from what your employer recorded on your Form W-2, Wage, and Tax Statement. This is why you mustn’t get distracted while filing your tax return.
What is the Time Limit for Tax Return Error Correction?
If you seek a refund, you have three years to submit the amended form, but you can file a Form 1040X more than three years after the original return was filed if you are not looking for a refund. However, the IRS only examines returns filed three years ago if they believe you committed a significant mistake, so if you made a minor error, it is unnecessary to amend it after three years.
Correcting an income tax return occasionally benefits the taxpayer. It is common for people to file amended forms to collect the child tax credit for previous tax years after learning they were eligible. Remember, it can be some time before you receive your refund check because the IRS might take up to sixteen weeks to review an updated return.
Conclusion
Making mistakes while filling out your tax return is a common occurrence, and that’s why the IRS has a Form called 1040X specifically for error corrections. Remember to file this amended form before three years have passed from the date of the original return filing because, after that, you won’t receive any refund even if the IRS owes you one. That is why; if you are not sure about tax rules, it is best that you get help from outside CPA services so that you don’t pay extra tax.
