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Money Talks: Changing Tax Mistakes

Believe it or not, Uncle Sam is pretty forgiving when it comes to income tax filing mistakes, just as long as they're honest mistakes.

And here's how it happens all over the country. Just as you're ready to put the 2002 tax return stuff away for good, you realize you made some big boo-boos that you failed to catch before you sent them to Uncle Sam.

Those mistakes could cost you some money, not to mention the unpleasant prospect of an IRS audit. But, is it too late to correct those mistakes? Not if you have the X-File: Form 1040-X.

Nothing mysterious or eerie about this X-file. Basically the IRS wants to know what you originally reported, what your corrected numbers are and why you're making the changes.

The 1040X allows you to correct just about any error, even your filing status. It happens. One example? Folks who get divorced forget to file as single taxpayers.

Filing a 1040X is also a good idea if it leads to paying more income taxes. Say if you forgot to report a significant amount of income, maybe a side job that where you earned some money. Better you be the one to catch the mistake first before Uncle Sam does, because ultimately you'll end up paying interest and penalties, even for an honest mistake.

The IRS allows you a three-year limit on amending your returns, so don't delay, find those overlooked refunds today.


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