We get this SOS call more often than you’d think and it’s easy enough to remedy the situation, when you know the steps to take in Michigan.
First things first. Typically, simple mistakes, such as a miscalculation or a forgotten form, are caught by the IRS. If this is the case, you will receive a notification that they have made the re-calculation on your behalf or a request for more information. So, we always recommend waiting to get that initial assessment back from the IRS. It may be all it takes to correct the error.
If you have already received your assessment and the error was not caught, or if the error is more complicated and based on an omission on your part, you will likely have to complete a Form 1040X Amended Return along with an explanation of the error. Once that is complete and submitted (by snail mail), you will then receive a response stating whether your amendment was accepted and notice of how the amendment affects your initial refund or balance.
FYI… Many people think that they shouldn’t cash their initial refund cheque if they have to make an amendment, but go ahead and cash it; any changes will be reflected and addressed once the amendment is complete. Keep in mind that if your error results in a balance owed, the interest will be calculated from the April deadline date.
If you still aren’t certain whether you need to file an amendment, the IRS has created this “survey” to help you decide – https://www.irs.gov/help/ita/should-i-file-an-amended-return. Better yet, call your E&Y Michigan Tax team and we’ll take the worry off your shoulders.
Timing is Everything When It Comes to Tax Returns
If you know that you have an error on a tax return within the past three years and think, “maybe they won’t catch it,” think again. The IRS typically has three years with which to catch an error and demand action. For those errors that amount to more than 25% of the gross income, the statute of limitations increases to six years. That could amount to a lot of interest on any balance owed.
Plus, there is no statute of limitations if it is deemed that the return was fraudulent in nature. Better to be honest than sorry.
You are making the best choice when you bring your tax questions to our Michigan tax experts. With decades of experience, we can answer your questions and provide the advice that has you breathing a sigh of relief. Let’s get your back on track today.
About E&Y Agency
E&Y Insurance and Tax Agents are dedicated to giving our clients the products that provide quality protection and value pricing and the peace-of-mind in times of crisis. Our goal is to establish a successful partnership with our clients, our staff members, and our partner companies. Our success is measured by our clients choosing us because they believe in our ability to meet or exceed their expectations of price, service, and expertise. Call us now to talk about your insurance or tax needs!
