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Did you forget something on your income tax filing?

On Behalf of | Apr 14, 2016 | Tax Law

With the income tax filing deadline of April 18 just past, few people probably want to think any further on taxes or their liability for their payment. At least, not for a few months. Unless you have to pay quarterly taxes or estimated taxes, most who file need not worry about income taxes for a few months.

However, what if you or your accountant should discover that there was an error on your income tax filing? If it came via some form such as a 1099 that is reported to the IRS from an entity like a bank or from a partnership or limited liability company that you have an interest in, the IRS will notice that it was not reported on your tax filing and they will, eventually, expect to be paid.

The way to fix an inaccurate tax return is with an amended filing. To amend, you will file a Form 1040X, no matter which form was used in your original filing and it must be done via a paper form. There is a three-year statute of limitations, and while you can wait until near the end of the three years, keep in mind that interest begins to accumulate on any tax owed and not paid by April 18 of this year, even if you have obtained an extension.

If you are claiming a larger tax refund, you may wish to file as soon as you discover your error, to recover the overpayment. However, claiming a windfall may provoke a closer examination by the IRS.

On the other hand, delaying paying delinquent taxes, in addition to allowing the interest to accumulate, may also trigger the levying of penalties by the IRS if it believes that your actions were intentional and that your original filing was not in good faith. All tax filing are done under penalty of perjury and you do not want to create a more costly issue to resolve than merely paying the taxes on time would have cost.