So, You *#$@%& Up Your Tax Return? Here's How To Fix It

We know you didn’t mean to do it. Now you’ve filed a totally incorrect tax return and you’re freaking out. “Why? Why did I tell the IRS I had a farm in Guam?”

It’s cool. You can fix it. Allow us to introduce you to Form 1040X. X as in, you are X-tremely bad at doing your taxes. No, just kidding. Bankrate says you should correct your return as soon as possible to prevent nasty things like interest and penalties:

Taxpayers also should be diligent about correcting their returns even if it means they end up paying a bit more in taxes.

Why? Because it’s a pretty safe bet that the IRS is going to discover your error eventually.

If it’s a simple addition or subtraction mistake, there’s no need to amend the return. The IRS says its computers will detect the error, notify you and adjust your return automatically.

But if it’s something bigger — you overlooked a Form 1099 for $1,500 you got from a freelance house painting job — and you catch and correct it first, it could save you from paying even more to the IRS.

The IRS may not penalize you for this honest mistake, but it sure will collect some interest on the proper amount you didn’t pay on time in the first place. The sooner you correct the error, the less interest you’ll face.


Made a mistake? Form 1040X can save the day
IRS Form 1040X (PDF)


Edit Your Comment

  1. fhic says:

    I had to file a 1040X this year. First time ever. I received a K-1 from a trust on 4/14, which showed interest, dividends and capital gains that I wasn’t expecting; I thought it was a straight non-taxable inheritance. I’d filed early and already received a refund, which I ended up paying back plus some extra.

    I was semi-annoyed at how poorly TaxCut (which I love other than that) handles a 1040X. There’s a lot of manual effort involved, including some actual calculating and filling out forms. Oh, the horror! And it doesn’t seem to fill out the CA 540X at all. And there’s no e-filing for the 1040X and CA 540X– you have to print out paper copies and mail them. More horrors!

    Fortunately, I was able to get some help from the trust executor’s accountant. I think she felt guilty about sending the K-1 at the last minute.

    All in all, the 1040X and associated schedule wasn’t the worst form I’ve ever filled out. And I was pleasantly surprised at just how easy it was to get the necessary forms from the IRS and CA Franchise Tax Board web sites at the last minute.

  2. Goldenthorn says:

    My brother, being the 21 yr old oblivious frat boy that he is, completely neglected to send his w2 form to our accountants. When I suggested he get his butt and his butt’s papers over to the accountant, forthwith, he just shrugged and went back to playing WoW. So his forms ended up only stating a declared income of $600 for 2006. It’s good news that the tax forms can be corrected (though I do harbor a secret desire of hoping he gets into trouble so that he learns some sort of fiscal responsibility lesson).

  3. mkiff says:

    And if you amend your federal return, don’t forget to check your state return – it’s based on your federal AGI. States can be just as nasty…

  4. aishel says:

    The problem with ammended returns is that TaxCut doesn’t support the ammended forms, even though they have the federal forms. Here’s my story with TaxCut:

    I tried contacting TaxCut because I needed to file an amended return. To do this, I need to file my amended return to both Federal and State. However, the software that I have only has the 1040X (Federal form), and no 502X (Maryland State form). When I contacted TaxCut online support, the guy told me that they don’t support the 502X, and that I should paper file it.

    Well excuse me, but I could paper file my entire return if that is what I wanted to do. The whole point of the software is that they should pre-fill all my numbers. What purpose is there for the software if it can’t do that? And then the guy tells me to paper file. Chutzpah!

    Here is the transcript:

    Welcome to TaxCut technical support. Please wait while we find a technical support agent to assist you.

    Feel free to minimize this window. When an agent is available the window will pop to the forefront.
    You have been connected to Damion J.
    Damion J: Hello , welcome to H&R Block’s TaxCut Online Chat Support in North America! How can we assist you today?
    Customer: Hi, I had to file an amendment on my taxes
    Customer: I found the 1040X no problem
    Customer: but when I went to do my state amendment
    Customer: I can’t find the 502X form
    Damion J: I can help you with that.
    Damion J: May I have a moment to research some information for you?
    Customer: sure
    Damion J: Which package did you purchase
    Customer: premium + state
    Damion J: May I have a moment to research some information for you?
    Customer: sure
    Damion J: Thank you for holding.
    Damion J: That form is not supported with the package you have selected.
    Customer: why not?
    Customer: the state program should include all the state forms. If the federal program contains the 1040X, the State return should include the 502X
    Damion J: Are you sure about that form number? I looked in the IRS website and no form 502x exists.
    Customer: This is the amendment for my state return, not the federal return
    Damion J: I understand that.
    Damion J: May I have a moment to research some information for you?
    Customer: yup
    Customer: The form is on this page:
    Damion J: Thank you for that information. However our program does not support that form.
    Damion J: You can get that form and paper file your amended return.
    Customer: But isn’t that the whole point of the software? So I shouldn’t have to paper file my amended return? I could paper file my entire return in the first place. The point of the software is that it should be able to plug in the numbers for me.
    Customer: If the software supports an amended return for the federal return, why doesn’t it support an amended return for the state return if I paid for both federal and state?
    Damion J: I am not the designer of this program and I can only tell you what we do and do not support and unfortunately we do not support this form. I am sorry for the inconvenience.
    Customer: Sigh, ok, thanks anyway
    Damion J: Is there anything else we can assist you with today?
    Customer: that is all
    Damion J: Thank you for contacting TaxCut Online Support, , and we look forward to serving you in the future!

    I knew there was no point in arguing further, since there really isn’t anything he could do. It just makes the software pointless if it doesn’t include all the forms.

  5. pestie says:

    The IRS’s computers really do a good job of correcting your errors automatically. An ex-girlfriend of mine used to just send in her W-2’s and a signed, blank 1040 to the IRS. They would do all the paperwork and send her a refund. Yes, she is insane, and I’m sure she never checked their numbers, but she did this for years.

  6. Timbojones says:

    I’ve never understood how or why the IRS can charge interest on money you owe them, but won’t pay interest on money they owe you.

    Strike ‘why’ — obviously because they want more money. I just wish there was a little more to that ‘for the people’ ideal.