Making mistakes on your tax returns is common, but failing to correct them can lead to penalties, interest charges, or even an audit from the IRS. Thankfully, there are straightforward ways to amend errors on your filed tax returns. This article outlines the common tax mistakes filers tend to make and provides guidance on the best way to fix them in 2024.
Common Tax Return Mistakes
According to IRS data, around 10 million taxpayers need to file an amended return each year due to initially submitting returns with errors or omissions. Some of the most frequent tax mistakes include:
- Inaccurate personal information: Misspelled names, incorrect social security numbers, wrong bank account details, etc. This can delay return processing or refunds.
- Math miscalculations: Arithmetic errors when totaling income, deductions, tax owed, or refund expected. The IRS’s automated systems double-check all calculations.
- Missed income sources: Forgetting to report even small amounts of income from side jobs, investments, rental properties, prizes etc. The IRS cross-checks filed returns against documents it receives.
- Overstated deductions: Claiming deductions or credits you don’t qualify for will lead to the IRS revising your tax liability.
- Incorrect filing status: Choosing the wrong status, such as Head of Household when you don’t meet eligibility criteria. Marital status for tax purposes is determined as of December 31.
How To Amend a Tax Return
If you identify an error after filing your return but before the due date, simply submit another original return with the correct details, rather than an amended return.
However, if the due date has passed, submit an amended return using Form 1040-X. The most recent versions of popular tax software like TurboTax and H&R Block make amending returns easy. You can now electronically file 1040-X returns for the previous 3 tax years. For older returns, paper filing is required.
When completing Form 1040-X, enter the corrected figures and explain the specific reasons for amending. Detail all changes being made, providing IRS notice numbers if you received any.
Mail paper returns to the appropriate IRS processing center based on your state. Retain proof of timely mailing.
Track Amended Return Status
You can check the status of your amended return using the IRS Where’s My Amended Return tool. It tracks status of amended returns filed in the current year and previous 3 years.
Due to pandemic delays, processing can take up to 20 weeks so avoid calling the IRS to follow up unless specifically instructed to.
Responding to an IRS Notice
If you receive an IRS notice before filing your return, it likely means they identified a discrepancy in information reported. Carefully review the notice details and ensure your response addresses the IRS’s concern.
If the notice reflects a different error from what you intended to correct, make sure to fix both issues in your response to avoid further notices. Provide all relevant details to resolve the matter.
Similarly, if you get an IRS audit notice after submitting your return, follow the specific instructions provided on how to address their concerns and send supporting documentation.
Key 2024 Tax Changes
When amending past returns in 2024, be aware of major tax law changes that took effect which you’ll need to consider:
- Higher standard deduction amounts increased to $13,850 for single filers and $27,700 for married couples filing jointly.
- The maximum Earned Income Tax Credit is now $7,430 for qualifying taxpayers with 3 or more children.
- Higher income phase-outs now apply to certain deductions and credits like the Child Tax Credit.
- Various retirement account limits have been raised – for 401(k)s the elective deferral limit increased $500 to $22,500.
Expert Support For Peace of Mind
To avoid the stress of amending tax returns yourself, consider enlisting the help of a tax professional or CPA specialist. They can ensure you file accurate returns from the start, and smoothly handle amendments or audit defense if errors do occur.
While amending tax mistakes might seem intimidating, taking the right steps as outlined above makes the process manageable. Pay close attention to IRS notices, meet all response deadlines, and leverage experts to verify your corrections meet requirements. Handling amendments promptly reduces the likelihood of penalties down the road.