Posted on: 5 June 2019
If you've used tax software to prepare your federal and state income tax returns for the last few years, you may find yourself with nagging doubts about the accuracy of your return—especially if your income and deductions haven't changed much from year to year while the amount of taxes owed has. But what are your options when it comes to reviewing past years' returns for accuracy? Should you simply wait until you receive an audit notice from the IRS? Read on to learn more about some factors to consider (and paths to explore) when you're considering reviewing prior years' tax returns.
Can Prior Years' Tax Returns Be Amended?
Even if you've already paid your taxes owed or received a refund for a prior tax year, it's not too late to amend your return so that it shows an accurate figure. Although the IRS won't usually penalize you for incorrect tax information if it resulted in you getting less of a refund (or paying in more) than you should have, underwithholding or underpaying can mean getting walloped with fees, penalties, and interest payments years later. And if an audit of a recent tax year reveals systemic issues, the IRS or your state's revenue agency may begin digging into other returns as well.
Can a CPA or Tax Attorney Help You With Your Past Taxes?
There's a common misconception that CPAs and tax attorneys may be unwilling to review prior tax returns for clients who went the DIY route or used tax software to complete these returns. But in most cases, a CPA or tax attorney will be more than happy to help make sure your taxes are in order for prior years and going forward. There are a couple of reasons for this.
1. Having a solid (and accurate) baseline makes future calculations simpler. For example, if you're dealing with carryover losses or depreciation expenses spanning multiple years, a mistake on your 2016 return could impact the numbers used for your 2019 return and beyond. Catching this mistake in 2019 can mean you'll have to amend prior returns anyway so that the correct number can be used.
2. Tracking down any extra deductions or credits a taxpayer is owed (but would not have otherwise received) is a great way to secure future business.
So, if you're still not feeling confident about past years' tax returns and would like to build a relationship with someone who can help you with future taxes, seek out the help of a tax attorney or CPA today.Share