Taking Steps to Correct Errors on Your Tax Return

by | Jun 5, 2023 | IRS

Tax return preparation and understanding can be difficult and complicated.
Even experts occasionally have trouble making sure all the numbers and details are correct. Frequently, errors aren’t discovered until attire the return has been mailed or submitted online, or even worse, when the IRS sends a notice about differences. Knowing what to do next is essential if you ever find yourself in this predicament.

Fortunately, you have a number of options. However, it’s advised to get help from a tax resolution specialist if you’re unsure of where to start. You can have piece of mind knowing that our team of professionals has experience navigating the IRS’s complexity.

Contact us immediately for a free consultation if you have unpaid taxes or back taxes.

Common Error Types

Each tax return is examined by the IRS for any red flags. Here are three errors that tax payers frequently make:

Not disclosing all revenue: It’s important to accurately declare all income, regardless of the quantity obtained. The IRS receives duplicate copies of your W-2, 1099, and other income-related papers unless you operate a wholly cash-based firm (which raises a red signal). Your claimed income may raise suspicion if it differs from the IRS data.

Overstating company costs: Depending on your line of work, there may be reasonable costs that you incur but are not reimbursed by your employer. There can be a tendency to overstate deductions if you own a business. Despite the fact that some deductions might be acceptable, it’s crucial to stick to the list of permitted deductions and refrain from going above and beyond. To ensure compliance with tax rules and avoid making erroneous deductions on your return, seek advice from a tax expert.

Math errors: Your information is input into a computer system whether you file electronically or on paper. Since computers are so good at math calculations, any mistakes or anomalies jump apparent.

Even while a math mistake may not always result in an audit, it can draw unwanted atention. Such problems can be avoided by double-checking your taxes and working with a skilled tax consultant.

Amending a Return – The 1040X Form

Within three years of the initial due date, individual income tax returns may be updated by submitting IRS Form 1040X. Using this form, you can tell the IRS what was originally filed, what
was incorrect, and why the adjustments were made. It also enables changes to personal exemptions, such as fixing mistakes with dependents.

Below are some pointers for submitting the 1040X form:

For each year that needs corrections, mail a different 1040X form in a different envelope.

At the top of each form, clearly state the tax year.
On the form’s reverse, specify the modifications and justifications for the corrections.
Include any schedules, forms, or supplementary materials that the changes will effect.
Submit a revised return for the applicable state as well if your federal errors have an impact on your state taxes.

It is highly advised that you seek the advice of a tax resolution specialist for help with your revised return. They can assist with filing multiple years’ worth of unfiled tax returns, make it easier to setle for a lower sum, and offer helpful advice to help you stay out of trouble with the tax authorities.

You Have 3 Years

Many people don’t find problems in their tax filings until they’re preparing their returns for the following year. These errors could be discovered through personal scrutiny or talks with tax preparers. There is no set period of time during which a return may be amended; changes may be made anytime an error is discovered. However, the IRS often allows adjustments up to three years from the filing date of the initial return.

The 1040X is a Paper-Only Form

The 1040X form must be filed on paper, even if you usually e-file your tax forms.

The 1040X form cannot yet be submited electronically to the IRS. Keep in mind that the mailing address for the form is different from the one for standard returns.

If Correcting Mistakes Results in Additional Taxes Owed

It is critical to update your return as soon as possible if you find a mistake that understates your tax liability. Significant differences, like undisclosed self-employment or freelance income, are likely to be found by the IRS, who may then assess interest and penalties on the unpaid taxes. You can lessen the effect of interest fees by proactively fixing the issue.

You should get in touch with our business for assistance if you expect to have a substantial tax obligation, owing the IRS or state more than $10,000, and are unable to pay it all off at once. We specialize in assisting people with tax relief, and in some situations, we can help them setle their tax burden for a small portion of what is owed. Please don’t be reluctant to contact us if you need help. www.cotslaw.com.

To remain in compliance with IRS rules and reduce potential fines, you must fix errors on your tax return. With the help of a tax resolution specialist, you may take the necessary actions to revise your return, ensuring accuracy and allaying any worries you may have about your tax situation.

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About Daniel T.A. Cotts

Daniel is a skilled Tax Attorney who moved to Corpus Christi in 2019 to expand his practice and return to Texas. With over 26 years of experience in the legal profession, Daniel brings a wealth of knowledge of Taxation, IRS Dispute representation & resolution, Estate Planning, Accounting, and Business & Contract Law to South Texas.


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