Tax Return Mistakes


by Richard Hart, EA, CAA

hat happens if you discover a mistake on your tax return after you have filed it? First, don’t worry because mistakes are fixable. NO. 1 The Internal Revenue Service may fix the mistake for you. Most of the time, you’ll want to fix your own mistakes, but sometimes it might make sense to let the IRS do it. The IRS will correct math errors. These are the harmless errors that you can happily let IRS correct for you. If the IRS does correct a mis - take, you will receive a letter explain - ing the adjustment and advising what steps, if any, you need to take. NO. 2 You can fix most mistakes by filing an amended return. If IRS doesn’t correct your mistake or if it’s a huge mistake or if you forgot to report something important (like being married), you’ll want to fix your own mistakes. Do this by amending W

your previously filed tax return with a federal form 1040X , Amended U.S. Individual Income Tax Return. You can use form 1040X to correct a previ - ously filed form 1040, form 1040A, form 1040EZ, form 1040NR, form 1040NR-EZ, or to change amounts previously adjusted by the IRS. NO. 3 Pay attention to the instruc- tions. Form 1040X is short, but it can be confusing if you don’t follow the instructions. Form 1040X is the ONLY tax form you’ll use to correct your mistakes. You don’t need to file another form 1040. NO. 4 You’ll need a copy of your pre- viously filed return. On form 1040X, in Column A, briefly sum - marize the items on your tax return as originally reported. In Column B, indicate any adjustments for items of income, deductions, liabilities, and payments. In Column C, report the

correct amounts as they should have appeared on the original tax return. That means that Column A + or – Column B should equal Column C. NO. 5 Remember that changes to one itemmay have other con- sequences. For example, if your adjusted gross income (AGI) chang - es, items that use your AGI may also change (such items include certain itemized deductions, tax credits, and taxable amount of Social Security benefits). The same goes for chang - ing your filing status. NO. 6 Just because a tax break has disappeared doesn’t mean that you can’t claim it on an amended return. The Tax Cuts and Jobs Acts (TCJA) changed a lot of tax items. However, as long as those tax breaks were still applicable for the tax year you are amending, you can still make the change.

54 | think realty magazine :: march 2021

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