Tax Tip of the Week
For the week of May 3, 2004

Mistakes can be corrected

Has this ever happened to you? You rush to get your income tax return in the mail only to discover a deduction you overlooked. Or you receive a corrected year-end statement for one of your investments a week after you dropped your return in the mail. Well, the good news is that you can correct your return for up to three years after you file your original return.

Oversights and errors are not uncommon, so the IRS provides a way for you to correct them. You need to tell the IRS why you are correcting the return, and include the appropriate attachments, such as a corrected Form W-2, with your amended return.

Filing an amended return doesn't extend the time the IRS has to examine your returns unless your original or amended returns were fraudulently filed. The IRS generally has three years from the date your original tax return was due or from the time it was filed to examine your returns (both original and amended) and to adjust your tax. If your amended return is properly prepared, your chances of being audited are probably no greater than they were on your original return.

You should consider the size of the refund or balance due before you rush to amend your return. In other words, a $25 refund would probably waste more of your time than it is worth.

If you've discovered income or deductions that you should have reported on your income tax return, give us a call. We can help you set the record straight and pay only the tax actually due.

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