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What Happens If You Realize That Your Taxes Were Incorrectly Filed?


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So, what if you just filed this year’s taxes and realize that you’ve made a mistake? And just to be safe you decide to go through past years’ taxes and realize you’ve made mistakes on some of them as well. What do you do?

Hey, it happens. Just consider the several thousand pages of tax code. There’s a difference between common mistakes like omitting forms and missing deductions, and purposely neglecting to report income or intentional failure to file your tax returns altogether. Please note the latter can be construed as a criminally punishable act (just ask Wesley Snipes or Willy Nelson). Before you know it, you’re investigating terms such as “tax haven,” “offshore” and “non-extradition.”

There’s a wide array of mistakes commonly made when filing taxes. Good references, in addition to IRS.gov, include the National Taxpayers Union and TurboTax.com, among others. Here are some general mistakes made on tax returns, and what to do to remedy them.

General Mistakes on Tax Returns to Keep in Mind:

  • Omitting forms
  • Missed tax deductions
  • Bad math
  • Too many exemptions
  • Incorrect state tax refund amounts
  • Failure to claim tax credits
  • Forgetting to report income

Failure to Report Income

If you failed to report investment or earnings income, chances are the IRS knows about it based on your Social Security number and can check reports from your employer or obtain records of income. For those of you paid in cash, though evasion may be tempting, it is your civic duty to report these earnings. Don’t be too cavalier in taking liberties at the IRS’ expense; you won’t win.

Deductions

Many of the big hit stories around tax time are never-ending lists of the most overlooked tax deductions. Included on these lists are charitable donations, child tax credit, student loan interest deduction, self-employed tax deductions, job deductions, miscellaneous expenses and many others. If you forget to file any year’s tax returns, or forget to report deductions, they must be filed using forms that correspond to that particular year.

Amended Returns

The Internal Revenue Service states that their internal service center is likely to correct errors made on a tax return’s math and “may accept returns with certain forms or schedules left out.” However, the IRS does advise that you file an Amended Return Form 1040X if your filing status, income, deductions or credits were inaccurate or omitted. All corresponding necessary schedules and documentation should be filed with the 1040X. Pay careful attention to the three columns (‘A,’ ‘B’ & ‘C’) on form 1040; ‘A’ lists your original figures, ‘C’ lists the amended figures and ‘B’ lists the difference between them. If the IRS owes you money on past returns the general rule goes that the individual has up to 3 years after the date the taxes were due to file for the claim. If, for example, you over-paid a bill for 2007 however, you have 2 years from the date the taxes were paid to file a claim. The IRS will address your amended return within 8 to 12 weeks. If the IRS finds the claim to be accurate, recognizing that they owe you money, then the individual will be paid. Payment, according to the IRS’ accounts department, will come in the form of a check, as opposed to being added on to, say, next years’ returns.

Past due tax return information, such as W-2’s and all kinds of 1099’s, can be retrieved by contacting the IRS at (866) 681-4271.


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Minhthe Luu
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My tip to anyone on this is to keep good records carefully organized by the tax year. Three years from now you will not remember what those deductions were nor will you remember what you filled out Worksheet C a particular way.

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