Made a Mistake on Your 2023 Taxes? Here's What to Do Now

You've finally sent off your tax return to the IRS and -- too late -- realize that you did something wrong. Maybe you forgot about a retirement account withdrawal you made or a side hustle from earlier in the year. Or maybe you just mixed up some digits when filling out the forms. Whatever the cause, you've now got a problem.

Fortunately, it's a fixable one, but the solution may not be what you want to hear. Here's what you need to do to get things straightened out.

Why you can't just ignore a tax error

You might be tempted to do nothing about the error and hope the IRS doesn't notice it either. The chances of being audited are pretty low, but it's still not worth the risk. If the mistake caused you to underreport your income and the government catches wind of it, it could charge you additional taxes plus a penalty. And if it believes you were intentionally trying to hide some of your income, you could even face jail time.

If the mistake caused you to overreport your income or miss out on valuable tax breaks, doing nothing could cost you a part of your refund. This could be especially devastating if those tax breaks were worth thousands of dollars.

It's much better to tackle the issue promptly before the IRS catches on to it. Here's how to resolve it.

Filing an amended tax return

You can correct your error by filing an amended tax return. To do this, you must fill out Form 1040-X. You can do this on paper or through your tax-filing software. You may also be able to e-file your 2023 amended return if your software supports this. If not, you may have to mail it to the IRS.

On the Form 1040-X, you must enter the numbers as they appear on your 2023 tax return that you've already filed. Then, you must note the correct amounts and the differences between the two. You'll also need to write in an explanation of why you need to amend your return. And you must attach any supporting documents when you submit it.

Typically, you have three years from the date you filed your original return or two years from the date you paid the taxes you owe for that year, whichever is longer, to submit your amended return. But if you want the refund you're owed, sooner is probably better.

You will probably have to pay your tax software an additional fee in order to amend your return, and you may need to file an amended state return as well. If you have any questions about what to do, you might want to consult a tax professional who can advise you on your particular situation.

Next steps

After you've submitted your amended return, the IRS will review it. This usually happens faster with e-filed returns than it does with paper returns. If the amended return is approved and results in a higher refund, the government will send you the additional amount you're owed.

If the amended return results in a tax bill, you must either pay what you owe upfront or enter into a payment agreement with the IRS. There are options that give you several months to pay and monthly installment plans. But all of these methods require you to pay interest on your bill each month.

You can keep up to date on the status of your amended return through the IRS's website. And if you have any questions about an amended return you've submitted, it's best to contact the IRS. The whole process could take a few weeks to resolve, so try to be patient. In the end, it's worth it, especially if it puts more money back in your pocket.