Almost 100 million people are expected to file a tax return in the United States every year. Most of those people do.
If you’ve at some point been a part of the body of people that have submitted returns, you know first-hand how complicated doing so can be.
Filling out returns manually is a skill that most people don’t have anymore. Even when filing electronically, questions you’re asked can be so confusing that mistakes become a likely possibility.
All of that stress and confusion, for many, leads to error on tax return woes.
When you catch or suspect that you’ve committed a tax preparer error, what should you do? Will you get in trouble?
In this post, our team answers those questions and more to help you stay proactive during this stressful time.
1. Don’t Lose Your Cool
The very first tip we always give people when struggling with error on tax return stress is to not lose their cool. This may be the most important tip to remember because ruminating on the possibilities surrounding a bad filing usually does more damage to you than a bad filing itself.
Tax return errors happen every year, even by the most skilled of preparers. The IRS is equipped to deal with them and so long as errors were committed in good faith, you can fully expect to be okay as you move through the correction process.
2. Know That the IRS May Be Helpful
When the IRS goes through returns, they have certain workflows in place that let them catch common errors. These errors include math issues, numbers that seem abnormal, forms that don’t align with what’s typically required, and more.
If the IRS catches a simple error on your returns, they’ll likely send you a notice letting you know what the adjusted result of your taxes is and if you owe them more money than was expected.
So long as you agree to pay that additional expense, you should be squared away.
3. Consider If an Amended Return Will Be Necessary
Some error on tax returns problems won’t be caught by the IRS. For example, if you accidentally doubled your contractor expenses for your business and that number is still within the realm of what’s natural, your return may be processed as is.
At that point, you have the option to stand on the result of your returns or file an amendment.
The IRS has a nifty tool that can let you better assess if filing an amended return is a necessity. You can find it here.
4. Talk to an Accountant
Unless you’re 100% sure where your tax error is and feel confident in fixing it, consider hiring a professional to help you.
A pro knows how to correct a 1099, 1040, 1040EZ, and everything in between. They can work with your paper amendment or one that you fill out through your electronic preparation software.
Filing two bad returns in a row could land you in hotter water with the IRS so make getting things right the second time a priority.
5. Be Patient
Many people are used to filing their initial taxes electronically and getting answers regarding their returns in days. Amended returns are different.
First off, you’ll want to take a reasonable amount of time going over your amended return to make sure you get things right. Second, amended returns need to be mailed and cannot be filed electronically. Lastly, given how backed up the IRS usually is by the time people file amended returns, it can take them up to 16 weeks to process your updated information.
All of that to say that, while you should be mindful of IRS deadlines, slow and steady wins the race.
6. Appreciate That You May Receive a Penalty
The IRS usually doesn’t issue punitive penalties for tax errors. If you owed the IRS more money than you thought, they may charge you the additional interest they lost by not claiming the full amount you owed sooner. That’s all!
If mistakes were committed willfully, you could be facing steeper trouble.
Punitive damages for underplaying your tax obligations can be steep as can be the legal fees associated with fighting these charges. Therefore, we always recommend being honest when filing your returns.
7. Assess Where You Went Wrong and Do Better
After you’ve worked through all of your tax woes, you’ll be presented with yet another round of taxes come April. When that time rolls around, avoid another error that sets off a lengthy amendment process.
Did your tax software coax you into making tax errors last year? If so, go with an in-person preparer. Were you not as equipped as you thought to manage your taxes on your own? If so, look into automated help or a physical preparing agency to guide you through the tax process.
If there’s one good thing that comes out of incorrectly filing taxes, let it be the opportunity to learn from your mistakes.
Error on Tax Return Issues Shouldn’t Derail Your Life
We’ve known plenty of worriers that have let their error on tax return woes derail their lives. Don’t be one of those people.
Like we said, so long as there wasn’t poor intent involved in your tax errors, you’ll be fine. Take things one step at a time, cooperate with the IRS, and work with a professional to help you fix any mistakes you ran into.
By leaning on that workflow, we’re confident you’ll get out from under your mistakes and on with your life.
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