What Happens If You Make a Mistake on Your Tax Return?

Mistakes can occur when preparing and filing tax returns due to overlooked documents, data entry issues, or misinterpretations of tax regulations. The Internal Revenue Service (IRS) provides clear guidance for taxpayers to correct these errors.

Discovering a Tax Return Error

Tax return errors can come to light through a taxpayer’s own review or through the IRS’s automated systems. A taxpayer might discover a mistake while organizing financial records, reviewing past returns, or upon receiving corrected tax forms such as a W-2, 1099, or K-1 from an employer or financial institution. For instance, a corrected W-2 might indicate different wage amounts or withholding than originally reported, prompting a need to adjust the filed return. Similarly, finding a forgotten income statement or a receipt for a deductible expense after filing can necessitate an amendment.

The IRS also employs systems to identify discrepancies on filed returns. These systems cross-reference information reported by taxpayers with data received from third parties, including employers and financial institutions. For example, the IRS matches income reported on W-2s and 1099s against the income declared on individual tax returns. Computational errors, such as incorrect calculations of tax liability, deductions, or credits, are also identified by the IRS’s processing systems. If a mismatch or error is detected, the IRS will initiate contact with the taxpayer to resolve the issue.

Amending Your Tax Return

Information Gathering and Form Completion

Correcting a previously filed tax return involves gathering all necessary information. The primary form used for this purpose is Form 1040-X, Amended U.S. Individual Income Tax Return. This form corrects errors on a previously submitted Form 1040, 1040-SR, or 1040-NR, adjusts amounts previously changed by the IRS, claims certain elections after their deadlines, or makes claims for carrybacks due to losses or unused credits.

Before completing Form 1040-X, have a copy of the original tax return to be amended. You will also need any new or corrected tax forms, such as W-2s or 1099s, along with supporting documents like receipts or updated schedules that substantiate the changes. Form 1040-X requires taxpayers to enter the figures from their originally filed return, the net changes being made, and the corrected amounts. A clear explanation of the changes is also required on the form. Official instructions for Form 1040-X, available on the IRS website, provide detailed guidance.

Submission Process

Once Form 1040-X is completed and all supporting documents are assembled, the next step is submission. While paper filing is traditional, electronic filing of Form 1040-X is available for certain tax years and Forms 1040, 1040-SR, and 1040-NR. If filing a paper return, the mailing address for Form 1040-X varies depending on the state of residence. Send the completed Form 1040-X along with any necessary supporting documents.

After submission, amended returns have a longer processing time than original returns. Processing times for amended returns are longer than original returns, often 8 to 12 weeks, and sometimes up to 16 to 20 weeks. You can track the status of an amended return using the IRS’s “Where’s My Amended Return?” online tool, which updates three weeks after submission. The tool requires your Social Security number, date of birth, and ZIP code for status updates.

If additional tax is due, payment can be made through IRS Direct Pay or via mail. Refunds can be issued by direct deposit for electronically filed Forms 1040-X (tax year 2021 and later) or by paper check.

Understanding Potential Outcomes

When an error on a tax return is discovered, several outcomes are possible. The IRS may send notices to taxpayers to address discrepancies or underpayments. For instance, a CP2000 notice is issued for mismatches between income or payment information reported by third parties and the tax return. Math error notices are sent for computational mistakes identified by the IRS. Responding promptly to these notices with accurate information or an explanation is important.

Interest may be charged on any underpayment of tax from the original due date of the return until the date the tax is paid in full. Interest accrues regardless of whether the error was intentional or accidental. The IRS sets interest rates quarterly, based on the federal short-term rate plus three percentage points for individuals. For example, the interest rate on underpayments for individuals was 7% for the first half of 2025.

Penalties can also apply, depending on the nature and magnitude of the error. A failure-to-pay penalty is assessed if tax is not paid by the due date, at 0.5% of the unpaid tax per month, up to a maximum of 25%. An accuracy-related penalty (20% of the underpayment) may be imposed if the underpayment results from negligence, disregard of rules, or a substantial understatement of income tax. A substantial understatement for individuals occurs if the understatement is more than 10% of the correct tax or $5,000, whichever is greater.

An unresolved error may lead to an IRS audit. An audit examines financial records and tax returns to ensure accuracy and compliance with tax laws. Audits can range from simple correspondence audits, where the IRS requests additional documentation by mail, to more extensive office or field audits. If an audit confirms an underpayment, the taxpayer may be liable for additional taxes, interest, and penalties.