Fixing a Botched Tax Return

Kip Tips

Fixing a Botched Tax Return

If you have realized that you made a mistake or missed a deduction, it's not too late to file an amended return.

I got a surprise in the mail today: A check from the IRS. Uncle Sam actually gave me money because my husband and I made a mistake on our 2009 tax return.

We also got a check from the state a few weeks ago because of botched calculations. We used tax software to prepare our taxes, but clearly that didn't guarantee error-free returns. If the mistakes hadn't been in our favor, we wouldn't have been off the hook. The Tax Court recently ruled that using software doesn't insulate taxpayers from penalties owed for errors.

When taxpayers make mathematical errors, the IRS lets them know -- with a check if they overpaid or a notice asking for more money if they underpaid. However, if you failed to claim a deduction you were entitled to, don't expect Uncle Sam to know that you missed a break you deserved. It's up to you to file an amended return to claim deductions you might have missed the first time you filed your return. You have three years from the due date of your return to amend, which means April 15, 2003, for 2009 returns.

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For example, you might have missed a special deduction available to non-itemizers for sales tax paid on the purchase of a new car after February 16, 2009. Or perhaps you didn't know that you don't have to wait until you file your 2010 return to claim the first-time home buyer's credit if you signed a contract before May 1, 2010.

For more breaks you might have missed and how to file an amended return, see A Second Chance at Tax Savings.