The tax filing deadline has passed (unless you filed an extension) and you breathed a sigh of relief knowing you filed everything on time. Now you discover an error was made either in your information given to the preparer, or on the tax return filed. Now what do you do?
The first thing you will want to do is contact your CPA to alert them to the mistake. They will need to know what was listed incorrectly. Perhaps income or expenses were not reported accurately, equipment was sold and no longer should appear as an asset on your return, or maybe you have a new dependent to claim.
Or perhaps you had a child go to college, dependent care expenses, or charitable contributions that are allowable credits to reduce your tax amount due.
If the mistake is only a mathematical miscalculation, the IRS will adjust the figures when the return is processed. If the error is material and affects your adjusted gross income, exemptions, or tax due, the return will need to be amended.
You’ll want to have your amended return processed as soon as possible, especially if it increases your tax liability. Any underpayment may be charged a late filing penalty, and interest will accrued until paid in full.
What if the error isn’t discovered right away? Can your return still be corrected? If the adjustment results in a refund due to you, generally the amended return must be filed within three years from the date your originally filed.
For instance, if your 2012 return was filed in April 2013, you have until April 2016 to correct the return and receive your refund. Failing to file within this time frame will usually result in no ability to claim the refund due.
If the adjustment results in tax due, the three year statute of limitations does not apply.
Contact your tax preparer quickly if you discover an error on your return and file the necessary amendment as soon as possible so you can receive your refund quickly, or limit the amount of interest that will accrued until the balance is paid in full.