Many taxpayers believe that if they discover they made a mistake on their tax return, they should automatically file an amended return to correct the error. The truth is, it's not always necessary—or even advisable—to amend your tax return. So, when should you amend, and when should you just leave well enough alone? Let's take a closer look.
The answer to this question depends on many factors, but there are three general situations in which amending your return makes sense:
-You forgot to include a W-2 or 1099 form: If you forget to include documentation of your income, the IRS will likely send you a notice requesting the missing information. In this case, it's best to amend your return rather than simply provide the missing documentation, as this could result in additional penalties and interest charges.
-You need to correct your filing status or a number of dependents: If you discover that you incorrectly filed your taxes as married filing separately when you should have filed as married filing jointly (or vice versa), it's worth amending your return. The same goes for correcting the number of dependents you claim. These types of mistakes could result in you owing additional taxes, so it's best to get them corrected as soon as possible.
-You miscalculated your tax liability: This one is a bit trickier. If you miscalculated your taxes and underpay what you owe, the IRS will likely assess penalties and interest charges on the unpaid amount. However, if the error was due to an honest mistake and the amount owed is small, it may not be worth amending your return. The IRS may waive the penalties and interest if you can show that the error was due to reasonable cause and not willful neglect.
Only you can decide whether or not amending your tax return is worth it in your individual situation. However, if you do decide to amend, it's important to act quickly—you have only three years from the date of filing your original return (or two years from the date you paid the tax due, whichever is later) to file an amended return. After that time has passed, you will forfeit any refund you may have been entitled to receive. And keep in mind that even if amending isn't required in your situation, it may still be beneficial to do so—if nothing else, it will give you peace of mind knowing that everything on your tax return is accurate!
Blog Introduction: A bank levy is a legal seizure of your bank account balance by the IRS to satisfy a tax debt. The funds in your account, up to the amount of your debt, will be frozen and transferred to the IRS. If you have a joint account, only the portion of the funds belonging to the debtor will be seized.
There are several reasons why the IRS may issue a bank levy, including but not limited to:
-You failed to pay your taxes
-You failed to respond to an IRS notice
-You refused to set up a payment plan with the IRS
-You defaulted on a previous payment plan with the IRS
If you think you may be at risk for a bank levy, it's important to take action as soon as possible. The sooner you take steps to resolve your tax debt, the less likely it is that you'll face severe penalties like a bank levy.
A bank levy can be a frightening experience, but it's important to remember that you have options. If you're struggling to pay your taxes, reach out to a tax professional or the IRS directly to discuss your payment options. Taking action now can help you avoid major penalties down the road.