What happens if you realize that you made a mistake on your income tax return after it is already filed? First, don’t panic, it happens so often that there is a procedure in place.
You are going to have to do this filing all over again, but don’t get lazy and just let it go, figuring no one will notice. Depending on the mistake, you could get red-flagged for an audit or find yourself under suspicion of filing a falsified claim. Just get Internal Revenue Service form 1040X and start all over again.
The Internal Revenue Service will want to know what you filed on the return in error and what the actual numbers should be. They will also want to know how and why you made a mistake. There is an accommodation for removing or adding personal exemptions.
Even if filing an amended return increases your tax liability or causes you to owe rather than being entitled to a refund, you need to change it, no matter. If you don’t, you knowingly filed a false claim and that act is punishable by imprisonment. You can’t cry later, when the Internal Revenue Service catches up to you that you didn’t know any better and even if you could, you will still have to pay them back. Penalties, interest, and fines will have accrued since the day they issued your payment and you will be in deep.
The Internal Revenue Service is the best debt collection agency in the world. If you filed a return with wrong information that resulted in a refund to you, they are going to treat you like a thief. They will act as if you robbed them at gunpoint. The Internal Revenue Service Agents assigned to your case will no doubt be from the criminal division and they will have a United States Attorney itching to prosecute you. No matter how tempting it might be to “take the money and run”, there is no place for you to go. Just file the 1040X, because it’s easier in the long run.
If you made the same mistake in multiple years, you need to file an amended return for each of those years, individually. If you attempt to make changes for multiple years on one amended return, you will send up a glaring red light to the Internal Revenue Service.
If you hired a tax professional to file the return that needs to be amended, they should help you do that, but don’t just hand it off to them and forget about it. You, not the person who filed your return, are ultimately responsible for your own income tax return and every bit of information on it.