17

The title pretty well summarizes the issue. I filed my taxes and then almost immediately realized that I forgot to include $10 in interest that I got a 1099-INT for. Running through the calculations, it turns out that $10 does not change either my state or federal tax liability at all, my refund is identical. Should I file an amended return? I realize that the legal answer is almost certainly "yes, you must file an amended tax return for any change of income", but as a practical matter, will I face any consequences for not amending my return when it does not change my liability?

For context, I am a single filer with one job, an AGI of less than $50,000, and I take the standard deduction.

5
  • 2
    In general there's no legal problem unless you deliberately commit tax fraud. If you make an honest mistake that causes underpayment, you just pay the difference + interest.
    – Barmar
    Feb 6, 2023 at 15:36
  • 2
    FWIW, I technically owe the IRS $1 last year. I didn’t pay it and they never “came after me.” In the past I owed an amount like $10 to $20 and that is when I was sent a small “You owe us!” bill. Feb 6, 2023 at 17:16
  • $10 is the threshold for producing a 1099. Was it actually $10 or more?
    – JimmyJames
    Feb 7, 2023 at 17:34
  • It was $10.35 to be precise.
    – Jack
    Feb 9, 2023 at 20:52
  • In case anyone is interested, my tax return was accepted, my refund arrived within a few weeks, and I have heard nothing from the IRS. Obviously they may figure it out years from now, but it doesn't seem to have raised any immediate red flags.
    – Jack
    Oct 10, 2023 at 19:20

2 Answers 2

17

If there's no difference in your tax liability, nothing happens. The IRS won't even bother correcting your return - they mainly care about collecting the right amount of taxes from you.

If there somehow did end up being a balance due (say, $1), you could get hit with a tiny underpayment penalty. The standard failure-to-pay penalty is 0.5% per month up to a maximum of 25% of the unpaid balance.

The IRS generally corrects minor errors and either sends you a refund or a notice of balance owed. They realize that taxpayers aren't going to file their returns perfectly every time.

And no, you wouldn't go to jail over it. Just pay the balance if the IRS sends you a CP-501 Notice or similar saying you owe $x, and you agree with their finding. If you disagreed with their findings, you could start the process to contest the balance owed.

2
  • 1
    OP said "does not change either my state or federal tax liability at all, my refund is identical" -- so how would there be a balance due?
    – nanoman
    Feb 6, 2023 at 0:59
  • 8
    @nanoman, I said "if", because that addresses the case where a filing error results in a balance due, in other words, the worst-case scenario. I'll update it to be more clear that if there's no balance due, there's no correction the IRS needs to make, no CP-501, and no underpayment penalty.
    – Stan H
    Feb 6, 2023 at 3:08
41

If it doesn't change the result, I wouldn't suggest you bother filing revised forms until they ask you to. Which they probably won't, and if they do they won't beat you up about it.

I've been mail-audited several times. One time I forgot to claim a sizable loss, and the audit saved me a significant amount of money. Another time I forgot to claim gains on one account, and they basically said "Here is what we think you missed and what you would have owed on it. If you think we're right, no need to submit a new form; just pay the additional tax plus the late-filing penalty/interest on that amount." Pretty painless.

The IRS has no real interest in punishing people unduly for honest errors.

5
  • 1
    How much is the late-filing penalty/interest? Was it down in the noise, or was it kind of like a bank-fee in that you pay $50 that anything happened at all, and then a bit more for the actual problem? Feb 6, 2023 at 21:26
  • 1
    Not sure I remember offhand; I'd have to check it.
    – keshlam
    Feb 6, 2023 at 23:01
  • 1
    I remember it as being under 10% of what I owed, for a mistake in the previous year. For me, that's "down in the noise".
    – keshlam
    Feb 7, 2023 at 15:54
  • 2
    A long time ago I once fat fingered an amount in TurboTax - a $10,000-ish amount of income was entered as $1000 (long enough ago that it was the DOS version of TT). Several years later, I got a notice saying that I owed them $3000-ish. The letter implied that if I just sent them a check right away, there'd be no fuss and no bother. If there was a fine, it was minimal. I do remember verifying the interest, and what was due was whatever the IRS interest rate was at the time. It really was a painless process.
    – Flydog57
    Feb 7, 2023 at 20:23
  • I once had a return corrected as well, and they caught it before sending my refund and just took it out of that. I didn't have to do anything and I don't think there were any fees at all. So I agree, if you get it wrong and it doesn't result in owing money, they won't care.
    – Kat
    Feb 8, 2023 at 20:24

You must log in to answer this question.

Not the answer you're looking for? Browse other questions tagged .