Q. I just did and mailed my taxes and I have two questions. First, I omitted the tax exempt schedule required for item 15b on form 1040 NJ, so I made copies of the required schedule with a note explaining, including my Social Security number. It didn’t change the calculations. Do you think that’s okay? Second, for the federal return, I made a $6 error on a IRA amount which would have raised my tax by $1.45. I don’t plan to do anything about this. What do you think?
A. Thanks for the questions.
To your first one, be prepared for a change.
Your note may not get to the correct department and you are relying on New Jersey to append the schedule to your original return, which may not happen, said Janice Roberts, an accountant with Wilkin & Guttenplan in East Brunswick.
She said if an incomplete return was filed, an amended return would have been in order, including the additional required schedule.
“As a practical matter, since there was no change in your tax, one could have prepared the schedule and had it on hand in case a notice was generated,” she said. “You would then have it immediately available to mail in to answer the notice.”
To your second question, the Internal Revenue Service will compare the amounts reported on your tax return with the forms that companies have reported to them.
“If the IRS thinks that your error is a material one, then you will receive a Notice CP-200,” Roberts said. “In that notice, they will notify you that your return does not match the amounts reported to them.”
They will recompute your tax and bill you for the difference. This notice generally does not impose any penalties, she said, especially because your error is unsubstantial and sounds like a clerical error.
It would be considered “substantial underreporting,” if you understated your tax liability by 10 percent or more, Roberts said, and this would subject you to penalties.
Also know that generally, the IRS has three years from the due date of the return or the date on which it was filed if after April 15 to contact your regarding the assessment.
“It does not sound as if you are intentionally unreported your income,” she said. “As a technical matter, if one owes additional tax an amended return should be filed regardless of the amount. As a practical matter, many taxpayers generally would not bother amending for such a small amount.”
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