What Happens If I Forget to Claim Something on My Taxes?

Tax laws allow volumes of potential claims for tax deductions.
i Ryan McVay/Photodisc/Getty Images

With so many rules surrounding tax filing, it's no surprise when people forget to include something on their federal or state tax returns. Neglecting a claim might seem important to you, but check out the tax schedules. Fixing the mistake might not be worth the effort. If you're on a mission to get every legal dime back, fill out an amended tax form and file for your extra cash. If you forgot something major, filling the amended form is mandatory.

Something Small

The something-small tax mistakes include additional write-offs for charity donations or a small dividend check tucked in your glove compartment. The Internal Revenue Service and state tax authorities understand that stuff happens when organizing your tax receipts and filling out the forms. As long as you immediately file an amended form when you realize you have an extra claim, the tax folks won't assume you were trying to defraud the government. The only exception is if you have a refund coming from the current tax year. In that case, the IRS wants you to wait until you get your refund before filing an amended return. If you owe money to the IRS, file quickly and avoid late interest charges. The IRS automatically recalculates your taxes based on their information, so if you've made a math mistake, don't sweat it.

Something Major

Odds are, if you've forgotten something major on your taxes, you'll hear from the authorities before you get around to correcting the error. The computerized tax service automatically picks up math errors and any huge discrepancies from year to year. The tax folks also keep track of your financial information, including your annual salary, self-employment income, bank interest and dividend payments. Anything you've missed from the major categories sends up an audit flag. If your forgotten claim affects other tax liabilities, you need to act right away, before you're called up for an audit.

Amending Your Taxes

IRS offices have the official forms to amend your taxes. The paperwork, Form 1040X, is available in paper form from the agency and as an Internet download. If you filed forms 1040, 1040A, 1040EZ, 1040NR or 1040NR-EZ to do the original filing, this form does the amending job. Don't forget to recalculate your state taxes if the federal filing affects your cash back or tax liabilities on the state level. The longer you wait, the more interest you pay on any money owed to the state.

Time Limitations

Time is of the essence in refiling your amended form. You have only two years to file the amended tax form to reclaim cash if you didn't file the original form on time. If you did file your original form on time, you have three years to claim any extra cash. After these dates, the IRS owes you nothing, even if your claim is legal. Check with your local state tax office if you're late in filing an amended form there. Every state has different rules.

the nest