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When tax season hits, many people rush to complete their tax returns. First, because they’re looking forward to any refund they might be getting. Second, because it’s a best practice to reduce your risks of taxpayer identity theft. But in your hurry to get those forms filled out and filed, what happens if you file your taxes wrong? 

You might have a brief freak-out moment when you realize you’ve sent the Internal Revenue Service (IRS) wrong or incomplete information, but don’t worry. Everyone makes mistakes, and that includes the IRS. That’s why the federal tax service has processes and forms in place—just in case this happens. 

If you’ve filed your taxes wrong, you’re not in this alone. We’ve found everything you need to know about what happens when you file your taxes wrong, from possible reasons why to precautionary steps you can take to avoid this next time.

What Happens If You Make a Mistake on Your Tax Return?

Depending on the type of mistake, who finds it and how you handle the situation, a few things can happen when you file taxes incorrectly. Here are some things you might deal with: 

You Realize the Mistake Shortly After Filing

If you send off your tax return and notice that you’ve made a mistake, you can’t just refile another tax return and assume the IRS will know that it’s the right one. You need to follow the steps for fixing incorrectly filed taxes. That typically involves filing an amended return or sending a specific form in.

The IRS Finds Your Mistake When Processing Your Return

If the IRS finds something missing or thinks you made a mistake in your return, it will send you a notice. Typically, these notices let you know exactly which form you need to file to fix your mistake. They also give you a timeline, such as 20 to 30 days from the date you received the letter, to comply.

Getting any type of letter from the IRS can be scary, but don’t panic. The IRS sends hundreds of thousands of these letters out, and it just wants to see a response as soon as possible.

The Mistake Isn’t Found Immediately

If neither you nor the IRS finds the mistake, the tax return might be processed with the error in it. That could increase or reduce your refund incorrectly, depending on what type of mistake was made.

The mistake might be uncovered in the future during an IRS review or audit of records. You or your accountant (or CPA) might also find the error when conducting audits of your own files. In this case, you may owe interest on any amount that you should have paid but didn’t. You might also need to repay part of a refund that was incorrectly issued to you.

Since interest accrues from the original date the taxes were due, this can add up a bit. However, IRS interest charges are much less than charges due to failure to file or pay penalties. You should still file your taxes on time each year. It’s in your best interest to file accurately or correct any mistakes as soon as possible to avoid interest.

Steps for Resolving Taxes That Were Filed Wrong

How you resolve an incorrect filing depends on the mistake. If you receive a notice from the IRS about a potential mistake, follow the instructions in that document as soon as possible to resolve the issue. If you find an issue yourself, use the steps below to resolve it.

  1. Make sure that it’s really a mistake or issue. Double-check your filing, or if you’re not sure whether there’s a problem, consider getting professional help from a tax filing service or CPA.
  2. Determine whether the IRS already caught the issue. If your return has already been processed and you received a refund, double-check the amount. Did you receive more or less than you thought you would? If so, the IRS might have corrected your return for you based on W2 and 1099 information it receives about your income. You will likely receive a communication letting you know a change was made and why.
  3. File a Form 1040-X, which is an amended tax return. If you do need to provide updated or additional information to the IRS, you’ll need to file a 1040-X. Even if you simply need to append another form to your tax return, you still have to file the amended return. This lets the IRS know that you’re sending new information and it should reprocess your return in light of that.
  4. Plan to pay any new taxes you might owe as a result of the change as quickly as possible to avoid accruing interest.

Common Tax Mistakes People Make

Tax returns require a lot of numbers, math and reading. Getting all those details into the right columns takes work, even for pros. So, if you’re handling your tax return yourself, you could easily make a mistake. But it’s not something to feel bad about. Here are a few common tax return mistakes the IRS regularly sees.

  • Incorrect math.It’s easy to miscarry a number or even miss one completely when you’re adding up rows and columns to get the answer for the next line on your tax return. If the IRS catches an arithmetic error, it’ll usually fix it and notify you of the result.
  • Forgetting about a deduction or credit.This one can cause you to owe more taxes than you should. Unfortunately, the IRS isn’t under an obligation to find all your deductions for you, and it probably won’t let you know even if it does see the potential error. This is why it’s a good idea to use professional tax preparation software or work with a tax service so you get the largest refund you can.
  • Not reporting your full income.Whether you forgot about a W2 or got a 1099 in the mail after filing your taxes, this is one you should fix as soon as possible. Even if the income won’t change how much taxes you owe, it needs to be accounted for on your tax return.
  • Lying on taxes.You can’t fudge the numbers to get more deductions or hide income. That’s illegal, and this is the one time a tax mistake can come with consequences that go beyond a little hassle and a bit more expense. If you’re found lying on your taxes to evade paying them, you could be charged criminally.

Tips for Minimizing Mistakes Come Tax Season

Sure, filing your taxes wrong can be an honest mistake. And you definitely don’t need to freak out about it. But that doesn’t mean you should take a laid-back approach to taxes either. Follow these tips for minimizing the chances that you’ll make careless errors during tax season.

  • Keep up with your finances throughout the year.Keeping receipts, payments and income forms organized all year reduces how much work you have to do during tax season. It also cuts down on the chance that you’ll lose or leave out important information.
  • Use a professional service or software.Pay for an experienced pro to file your taxes to help ensure you cover all your basis and get the most in deductions. Many of these services will also file a free amended return if any mistakes were their fault. If you’re set on a DIY path, use a software such as Turbo Tax that walks you through each step of the return to help avoid missing info and common errors.
  • Wait to file until you have all the information.An early refund is great, but avoid filing before you have all your information. You can even file an extension by April 15 to extend your return due date through October 15 of the same year. Note that filing an extension does not extend your obligation to pay whatever taxes you might owe by April 15.

Keeping up with your taxes can help you avoid a situation that could derail your entire financial life. But you don’t have rushing into filing to keep your identity and credit history safe. Instead, keep an eye on your credit report via our free credit report card all year to understand what’s going on with your score and identify potential fraud early on. Then, you’re free to file your taxes at a time that’s most appropriate for you and helps cut down on potential mistakes.

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  • Lishara

    I just received a 1099-C from the original creditor after my taxes were filed. My debt was settled through a collection company (payment on 12/15/14), what should I do?

    • Jeanine Skowronski

      You may want to provide proof of payment to the creditor. You can also consult a consumer attorney about your best options.

      Best,

      Jeanine

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