Well, it seems that you have found an error in your tax return. It happens all the time. Don’t worry, because there is a way out of it. Nobody will put you in prison just for making a typo on your W-2 form.
As you see, the IRS knows about our potential mistakes. That is why there is a special form designed specifically for correcting them, the 1040-X. It’s as close as you can get to a correction tape for your financial history. All you need to do is to fill in this form and show where the mistake was made and what is the right information.
Firstly, you will need your original tax return. Without knowing what was submitted initially, it’s impossible to submit corrections. Download Form 1040-X from IRS.gov. It asks you to provide three columns: original amount, change and the corrected amount.
And now comes the tricky part – the explanation of your corrections. Don’t overthink this step. Write “Corrected W-2” or “Forgot to include freelance income” in Part III.
Also, don’t forget that you have to submit the new forms that support your corrections. For example, if you got a corrected W-2 form from your employer, then you have to staple it to Form 1040-X. Not submitting all the required documents is the most common reason why the IRS won’t take into account your amendment. It is the same as handing in the homework without an assignment.
Back in the day, people had to submit all those forms by regular mail. Today you are allowed to e-file Form 1040-X for most tax years. It’s so much easier, as it takes much longer to send documents via mail. All you have to do is to go to the IRS website and see whether you can electronically file.
The last thing, which often confuses people, is that state taxes are different from the federal ones. In case you need to amend your federal tax return, most likely you have to amend your state taxes as well. Almost all states have a form of amendment.
Do not postpone the procedure for months, as the interest grows if you have debts to the government. However, the sooner you send the amendments to the IRS, the sooner you receive your refund.