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I'VE ALREADY FILED AND MY RETURN HAS A MISTAKE!

April 08, 2006

Every year it happens. After the return is filed, the taxpayer remembers that they sold some stock, or they get a corrected 1099, or they find a 1099 they forgot to give to the accountant. What to do?

It depends on what the error is.

THINGS TO CORRECT BEFORE THE DUE DATE:

If you owe a lot of money - say, more than 10% of your total tax - you should file an amended return by the April 17 due date. Otherwise you may incur late payment penalties.

THINGS TO CORRECT WITH AN AMENDED RETURN AFTER APRIL 15

If the error is small, there's less of a hurry. Your preparer will be a lot more friendly about correcting a return after April 15. If you will have an additional refund coming when you correct the error, the IRS pays interest. Let the smoke clear and file an amended return if the refund is significant.

Costs and benefits come into play here. You don't want to pay your preparer to file for a $10 refund; let it go. If it's the preparers fault, let him take it off the bill rather than generate IRS attention.

But if the refund is significant, don't be shy - file away. You have three years after the due date, so let your preparer have a few days off before asking where the amended return is.

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