What To Do If You Make A Mistake On Your Small Business Tax Return

Small business tax return mistakes can vary from simple math miscalculations to huge deduction errors. While the tax preparer you hire will have liability insurance that covers his or her part in any filing mistakes, you must take several steps to correct the mistake and prevent your liability, too.

Amend Your Tax Return


The IRS knows that mistakes can happen, which is why they allow you to amend your tax return. Essentially, this amendment corrects any mistakes.  

Find the X Form

To amend your tax return, you need to know the form number of your original return. Then find the X Form. For example, if you filed a Form 1040, look for the 1040-X. Likewise, Form 94X corrects employment taxes, and Forms W-2C and W-3C correct employee earnings and withdrawals.

Complete the X Form

Generally, you will need to print and complete the paper version of the X Form, even if you electronically filed your original tax return. The X Form includes three columns you must complete accurately.

  • Column A - amounts from the original return
  • Column B - net increase or decrease of the original amounts
  • Column C - corrected amounts
Additionally, explain the changes on the back of the form. Be thorough and accurate as you share your reasons for amending your tax return.

Include Related Forms or Schedules

Your tax return amendment may also change information on the other forms and schedules you filed. Complete corrected versions of these forms and schedules, and attach them to the amended X Form. If you forget to submit all these papers together, you will experience a processing delay.

File the Amended Form

After you complete the X Form with accurate information, mail it to the IRS. It usually takes a minimum of eight to 12 weeks for the IRS to process amended small business tax returns.

Pay Penalties

While you do want to amend your tax return and correct mistakes, realize that you may also owe penalties. Interest typically accumulates from the due date of your original return. Pay any tax you owe as soon as possible to decrease penalties.

File an Amendment as Soon as Possible

You may file an amended tax return up to three years after you filed the original return. Because your fees, penalties and interest charges increase the longer you wait, file any required amendments as soon as you realize the mistake.

When you notice a mistake on your small business tax return, you may take several steps to correct it. Take these steps as soon as possible to reduce your financial liability and protect your business.
Need insurance for You, Your Family or Your Business?
We can match you to a qualified, local insurance expert!
Further Reading
Small business tax return mistakes can vary from simple math miscalculations to huge deduction errors. While the tax preparer you hire will have liability insurance that covers his or her part in any filing mistakes, you must take several steps to co...
You spend much time together, and share the burden of difficult decision making. But it's not your spouse - it's your business partner. Your business partner is a tremendous asset to your company. So, how do you protect your business in the event of ...
Most new business owners are concerned that everything is favorable for the success and safety of their business, which includes obtaining the protection of business insurance. However, longevity and success can cause complacency. Let's say you star...
Every company has one or more "key employees" (whether it's an outstanding manager, a superstar salesperson, or a technological whiz) whose contributions are essential to the business. If one of these key people were to die, the impact on your operat...
In any traffic accident, two entities can be held liable for damages: the at-fault driver and the vehicle owner. Insurance companies generally view the vehicle's insurance to be primarily liable with the driver as secondary. Let's assume you're...