When Not to File an Amended Return

Do you ever have second thoughts about the tax returns you filed months ago? Despite those second thoughts, it’s not always worth the effort and expense to file an amended tax return when you realize that you made a mistake, says top CPA Ed Mendlowitz. Three examples of when not to file an amended return…

Your additional deductions and credits would result in a small refund. Weigh the cost of what you would get back versus your accountant’s fee to prepare an amended return. (But note that accountants don’t charge for an amended return if they made the mistake.) Even if you use tax software and can do it ­yourself, an amended return draws unwanted attention because the IRS takes a second look at the entire return. In my experience, that increases the chance that the IRS will do an audit or at least request additional documentation to substantiate what has been reported.

You made a simple math error. Example: You listed all your dividend income correctly but wrote down the wrong total on the first page of your return. In cases of math errors such as this, the IRS automatically will correct the error and notify you…and you won’t suffer any consequences except some interest if you owe additional tax because of the mistake.

You omitted a W-2 or a 1099 form. The IRS will process your return anyway and will contact you if more information or specific documents are needed.

Important: File an amended return right away if you made mistakes that could result in owing additional tax. This will limit interest and penalty charges that might accrue.