Suppose you just glanced at the 2016 tax return you filed in April and noticed an error or omission. Or maybe you remembered a deduction you neglected to include on your return from the prior year. Is it too late to fix things?

Not at all. As long as you meet the statutory deadline, you can file an amended return for the appropriate tax year, even if the original return was filed only a short time ago. But the question remains: Should you do it? The answer: It depends. There are several factors to consider in this decision, including the amount of tax at stake, whether the IRS owes you money, or you owe the IRS.

If the IRS owes you money, it may not be worth the extra cost and inconvenience of filing an amended return when the differential is insignificant. On the other hand, if you have a legitimate gripe and the refund would be substantial, go ahead and file an amended return. Many people suspect that filing an amended return increases your likelihood of being subject to an audit, but the IRS denies this.

If you owe the IRS money, the amount of the discrepancy is not as important. Typically you should file an amended return and pay the difference you owe as soon as you can. Otherwise, you run the risk of being assessed extra interest and penalties on top of the regular income tax that is rightfully due.

The deadline for filing an amended return is three years from the original due date and the IRS generally has the same three years to review your return. The audit period is extended to six years if you’ve underreported income by 25% or more. There is no time limit if fraud is involved.

Still not sure if filing an amended return is the right move in your case? Call our office so we can go over the details.