What happens if i did my taxes wrong

Again, using tax software will break down the rules for each circumstance and actually give you an error if you make a mistake, preventing you from accidentally falsifying your return. You might think that certain income doesn't have to be disclosed when filing your taxes, but this is a misconception. This includes overseas gains -- the myth of offshore banking is that it hides assets from the government.

However, you're actually required to disclose and report foreign income. That rental property in Costa Rica might not be on the IRS's radar immediately, but if you fail to disclose it, you could be looking at a stiff penalty. Editor's note: This post has been updated to correct an error about reporting contract or freelance income. The good news is that the IRS doesn't consider accidental mistakes as fraud.

A case for intention has to be made before the IRS actually charges you with a crime. Even so, mistakes can cost you a refund at best and a fine at worse. You could face penalties and become a blip on the IRS's radar for future returns. If you're doing your own taxes this year, make use of free software that the IRS makes available on its website. Or, call the Taxpayer Advocate Services hotline. They're there to help out so you don't get into trouble for making errors.

Chrome Safari Continue. A person who fails to pay will face a penalty of 0. People can also face a penalty if they fail to file their taxes at all and owe money to the IRS, Coombes says. If you fail to file but are owed a refund, the penalty would not apply. Errors that call for filing an amended tax return through the X include filing the original return under the wrong status, failing to report some income and claiming the wrong deduction, according to Coombes.

The drawback with filing form X, which involves going over your tax return to figure out what went wrong, is that it cannot be done electronically; rather, it must be mailed in. For other mistakes, like math errors or missing forms, the IRS will alert the filer or fix the problem for them, Coombes says. The deadline to file an amended return is about three years from the date you filed the original return. Write to Mahita Gajanan at mahita. Don't Panic. Here's What to Do Now. By Mahita Gajanan.

If you simply make a mistake and take action to correct it, then it is not unlawful. It is not a valid defense for any tax crime to claim a mistake or ignorance of the law. Claiming ignorance of the law will not help you with penalties if the IRS believes it was an intentional act. It will also not help against criminal charges. Everyone is presumed to know the law. The notice will state that you have under-reported income and will also state a proposed recalculation of your taxes based on their information.

If you realize that you did indeed leave off some income, the best thing to do is to contact them and tell them that you agree with their calculations. You can then pay the tax due without having to file an amended return. If the IRS rejected your original e-filed tax return, you should find out why it was rejected. Sometimes, it is merely a technical mistake, and you can correct and resend it. However, it is best to consult with a professional if you get a rejection from the IRS.

If you received an IRS audit notice, read the notification very carefully because it will explain why the IRS is auditing your return. Based on the notice, you should immediately collect all supporting documents to prove your position if you believe the IRS is wrong.