Can I Get a Second Look at My Taxes?

Filing taxes can be complicated, and even small mistakes or overlooked deductions can impact your return. Whether you prepared them yourself or used a professional, reviewing your taxes could uncover errors, missed credits, or opportunities for a larger refund.

Even after submitting your return, there are ways to review and correct potential issues.

Why Request a Secondary Review

Tax laws change frequently, and what was accurate last year may not apply this time. The IRS updates regulations annually, adjusting income thresholds, phase-out limits, and deduction eligibility. Reviewing your return ensures compliance with the latest rules and helps avoid penalties or audits.

Mistakes can happen with both tax software and professional preparers. Software relies on user input, so a simple data entry error can lead to miscalculations. Even experienced professionals may overlook details, especially when handling a high volume of clients. A second review can catch discrepancies that might otherwise go unnoticed.

Life changes can also impact tax liability. Marriage, divorce, having a child, or buying a home can shift tax obligations. If these events weren’t fully considered when preparing your return, you could be missing tax benefits or underreporting income. A secondary review ensures all relevant financial changes are properly accounted for.

Deductions and Credits That Might Be Missed

Many taxpayers overlook valuable deductions and credits simply because they aren’t widely discussed or require additional documentation.

One often-missed opportunity is the Saver’s Credit, which benefits low- to moderate-income earners contributing to retirement accounts like a 401(k) or IRA. This credit can reduce tax liability by up to $1,000 for single filers or $2,000 for married couples filing jointly. Unlike a deduction, which lowers taxable income, this directly reduces the amount owed to the IRS.

Education-related tax benefits are another area where people leave money on the table. The American Opportunity Credit provides up to $2,500 per eligible student for tuition, fees, and course materials during the first four years of higher education. The Lifetime Learning Credit offers up to $2,000 per tax return for a broader range of educational expenses, including graduate courses and professional certifications. Some taxpayers mistakenly assume employer tuition assistance disqualifies them, but they may still be eligible for a portion of the credit.

Medical expenses can also provide unexpected tax savings, particularly for those with high out-of-pocket costs. If unreimbursed medical expenses exceed 7.5% of adjusted gross income (AGI), the excess amount can be deducted when itemizing. This includes doctor visits, prescriptions, dental work, mental health services, and even travel costs for medical care. Many filers assume they don’t qualify because they don’t track smaller expenses throughout the year.

State and local tax (SALT) deductions are another area where taxpayers may miss out. While the total deduction is capped at $10,000, those who pay significant property taxes or state income taxes can maximize their benefit. Some filers also forget that sales tax can be deducted instead of state income tax, which can be advantageous in states with no income tax.

Common Errors That Prompt Another Look

Misreporting income is one of the most frequent mistakes. Many assume only W-2 wages need to be reported, but the IRS requires all sources of income, including freelance earnings, rental income, and certain digital transactions. With the expansion of third-party payment reporting under Form 1099-K, individuals receiving payments through platforms like PayPal or Venmo for goods and services may unintentionally underreport taxable income. Failing to report all income can trigger IRS notices and potential penalties.

Filing status errors are another common issue. Choosing the wrong one can significantly impact tax liability, deductions, and credit eligibility. Single parents may qualify for Head of Household status, which offers a higher standard deduction and lower tax rates than filing as Single, but many mistakenly file as Single due to misunderstanding the criteria. Recently divorced individuals sometimes forget that filing status is based on marital status as of December 31 of the tax year, leading to incorrect tax calculations.

Self-employment taxes are frequently miscalculated, particularly by those new to freelancing or contract work. Unlike traditional employees, self-employed individuals must pay both the employer and employee portions of Social Security and Medicare taxes, amounting to 15.3% of net earnings. Many fail to set aside enough to cover these obligations, leading to unexpected tax bills. Additionally, deductions specific to self-employment, such as the home office deduction or business mileage, are often miscalculated or omitted due to uncertainty about eligibility.

When an Amended Return May Be Necessary

Filing an amended return is necessary when a previously submitted tax return contains inaccuracies that affect tax liability or compliance with IRS regulations.

One common reason is misreporting investment income, particularly capital gains and losses. If a taxpayer receives a corrected Form 1099-B from a brokerage after filing, failing to amend could lead to underreported income or an overstated loss. The IRS cross-checks reported figures against financial institution records, and discrepancies may result in an automated notice or audit.

Another situation that warrants amending is the improper treatment of retirement account distributions. Withdrawals from tax-advantaged accounts like traditional IRAs or 401(k)s are generally taxable, but certain rollovers or qualified distributions may be exempt. If a taxpayer mistakenly reports a direct rollover as taxable income or fails to account for required minimum distributions (RMDs) from retirement accounts after age 73, penalties could apply. The IRS imposes a 25% excise tax on missed RMDs, making timely corrections through an amended return important.

Potential Refund Adjustments After a Review

A second look at a tax return doesn’t always result in an amended filing, but when errors or overlooked deductions are found, it can lead to a refund adjustment. If a taxpayer qualifies for additional credits or deductions, the IRS may issue a larger refund than originally expected. Conversely, if underreported income or miscalculations are discovered, it could mean owing more than initially anticipated.

When an adjustment results in a larger refund, the IRS typically processes it within 16 weeks if an amended return (Form 1040-X) is filed. For example, if a taxpayer initially failed to claim the Earned Income Tax Credit (EITC) but later qualifies, the IRS will recalculate the return and issue the additional refund. However, if the review leads to a balance due, the taxpayer may need to pay interest and penalties on the underpaid amount. The IRS charges interest on unpaid taxes starting from the due date of the return, which can add up quickly.

If the IRS identifies an error, such as a math miscalculation or a discrepancy in reported income, it may automatically adjust the return and send a notice explaining the changes. If a taxpayer disagrees with the adjustment, they have the right to appeal or provide additional documentation to support their original filing. Keeping thorough records and reviewing IRS correspondence carefully can help ensure corrections are handled efficiently.