While comparing my 2005 taxes to 2004, I realized I made a mistake on the 2004 return. Is it too late to fix the error?

It's not too late to make the change. You generally have up to three years after the original due date of your return to file an amended return if you've made a mistake or left out something. That gives you until April 15, 2008, to make changes to your 2004 return. And you have up to seven years to file an amended return for worthless stock. (For more information about those rules, and an example from Enron, see Writing Off Worthless Stock.)

To make the change, print out Form 1040X and fill in the numbers from your original return and then the changes you're making. You'll also need to submit the particular forms you're changing, such as Schedule A for changes to itemized deductions or Schedule C for changes to business expenses. For more information, see the IRS's Amending Your Tax Return and Instructions for 1040X. Also contact your state's department of revenue about amending your state income-tax return.

If the change lowers your taxable income, you could get a refund from the IRS. Before you make the change, though, keep in mind that it could affect other areas of your finances. Adding more business expenses, for example, will lower your self-employment income and may decrease the amount of money you could have contributed to a small-business retirement account in 2004.

For more information about your taxes, see our tax page and the Tax Answers column. For more information about tracking down the status of your refund and other post-deadline moves, see the IRS's The Deadline's Passed. Now What?

MORE: Kiplinger.com | Your Money | Taxes | Column

TOOLS:   E-Mail Article  |  Print Article  |  Reprint Article  |  Content Sales

E-MAIL ALERTS: Keep up-to-date with the latest Kiplinger has to offer

SAVE, SHARE & DISCUSS:    |   |   |   |   |   |   |   |   

ADD HEADLINES: