Ever wonder if you have to pay taxes on the side hustle that brings in a couple extra hundred dollars every month? What happens if you make mistake on taxes? Could you get in trouble if you don’t pay up every penny you owe come tax season?
Just know if you’ve made a mistake during tax season, you’re not alone. During one fiscal year, almost 14 million taxpayers owed close to $131 billion in taxes and penalties, whether due to making a mistake or fraud.
So, what’s the worst that could happen?
Here is a complete guide on everything you need to know about what happens if you make a mistake on your taxes.
What are the Common Types of Tax Mistakes People Make?
Some common mistakes in taxes that people make often include simple math. Either they tallied up their numbers incorrectly or forgot to include their W-2 form.
The good news is that if you made one of these simple mistakes, like a calculation mishap, for example, the IRS will generally correct it for you. No extra work is needed on your end!
If you made a more complicated mistake, like forgetting to send in a form or worse, the IRS will reach out to you and request whatever is missing from your tax return.
What Penalties Will I Face If I Make a Mistake on a Tax Return?
Let’s say that you accidentally committed one of the tax errors mentioned above. What happens when you make a mistake on your taxes?
If you made a math-related mistake that caused you to pay less than you owe, one of two things will happen. Either the IRS will deduct the money out of your tax return automatically and send you the check for however much money is left.
If you don’t have a tax return, you will end up owing money to the IRS and will most likely have to cut a check.
Who Can Help Me Fix My Mistake on Taxes?
If you have made a mistake that the IRS does not automatically fix, you might want to consider consulting with a tax professional here. Tax professionals can help you file an amended tax return and fix more complicated tax mistakes.
Plus, working with a professional ensures that you do not make the same mistake again.
Want to Learn More About Taxes?
Making a mistake on taxes is more common than you think and generally, it is not the end of the world. However, it is important that you fix it right away to make sure you do not face any extra penalties, fines, or worse, jail time.
If you are looking to learn more about tax mistakes, the IRS, and what a tax crime looks like, be sure to stick around. You will find tons of articles and insights about all things finance and taxes to help keep you in the clear.