What If I Mess Up On My Taxes? You'll Want To Act Quickly
Tax season is here again, and it can sometimes feel a little overwhelming. There's tons of paperwork to fill out, and several different ways to file it all. It's only natural to ask: What if I mess up on my taxes?
It's a complicated question because tax filing errors come in all shapes and sizes, whether in the form of a botched social security number or incorrect income reporting. But your best bet, either way, is to make sure that you correct it quickly. Reporting errors can sometimes result in tax penalties and additional interest, so if you don't want to pay the Internal Revenue Service (IRS) even more money, speed is definitely key.
If you realize you made a mistake after sending in your returns but you haven't received any notice about that error from the IRS yet, many financial bloggers recommend taking a proactive approach, regardless. This requires filling out a Form 1040X Amended Return, which does exactly what it sounds like. Unfortunately, if you generally file your taxes electronically, you won't be able to do so when it comes to correcting a problem. The Form 1040X must be physically mailed, along with all of the necessary associated paperwork. (What you need to send in will depend on what kind of mistake you made.)
If the IRS happened to notice the error before you did, they'll likely send you a notice in the mail. That should include detailed instructions for how to correct your mistake, and may also require filling out a Form 1040X.
The good news is, even though it can be intimidating to make a mistake, you're not alone in the process. People make mistakes on their taxes all the time. Specifically, the top five mistakes that people tend to make when filing their taxes, according to CBS, include: filing incorrect information, mathematical errors, filing the wrong paperwork, claiming wrong deductions, and failing to report income.
While each of those mistakes can be frustrating in their own way, the good news is that they can be corrected. And, according to CBS, the IRS doesn't charge people with a tax fraud-related crime if that person appears to have just made an honest mistake — another reason to make corrections as soon as you realize an error has been made.
Of course, the best way to avoid filing a return correction is to do everything in your power to avoid making a mistake in the first place. This means that, even though it can be time consuming, it's important to take your time filling out tax paperwork. Thankfully, filing online is as easy as ever, complete with smart guides to take you through every step of the process. And if that still makes you nervous, you can always go in person and meet with a professional tax preparing service. While neither of these options guarantees that mistakes will never be made, it can seriously mitigate the likelihood.
Tax season can feel like a lot of work. But if you take your time and correct any mistakes as soon as you notice them, you should be good to go.