I forgot to include $44 in interest on my taxes, should I file a 1040X or let is slide?
Should I let this $44 in income from a bank account slide? What are the chances of the IRS even catching it? How bad could the penalties be?
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Comments (7)
It’s highly unlikely that they’d come after you that over a paltry $44.
I wouldn’t worry about it. I think they assume that people will forget little bits and pieces like that from time to time. I’m about to send all my stuff to the guy that does my taxes and I’m sure they’re are probably a thing or two that I’m forgetting, but I know that I’m including all the major pieces and $44 probably covers some deduction that you could have had but didn’t know to claim.
If you’re worried about it, go ahead and file the amended return.
If you don’t, and the IRS catches it, they may send you a bill that you could either pay or dispute. It might take them two or three years to do that.
Or you could report it on NEXT years taxes.
But no, I wouldn’t sweat it that much.
If the IRS catches it they will send you a bill for the difference, and any interest would be minimal. Thye are getting better at matching these things as they get more computerized, so there is a good chance that will happen. The number is so small that it’s really not worth the cost to amend. Showing the income on next year’s tax return isn’t a good option, as you would still have to pay the tax if you should get a notice for the year you missed it, and then you will have paid twice (they won’t accept that you put the income in another year as a reason for not showing the income in the year earned).
Always do things the right way.
I agree it is not likely the IRS will contact you for $44.00 but they might. If you file the form 1040X and pay any additional tax by April 15, you will not have to worry about any penalties or interest that may or may not come up a year or two from now.
The IRS matches reported income with their records 100%. It’s done automatically by their computer system. If there’s a mismatch that increases your tax due the notice is kicked out automatically by their computer system. It will get a cursory glance by a human who will then hit the “Submit” button.
While the additional tax might not be much, it will be around 50% higher with the added penalties and interest that WILL be tacked on over the 12 to 24 months since the filing deadline.
It’s a common misconception that the IRS won’t go after the additional tax. If it’s $1 or more (and it probalby will be) it’s automatic.
Avoid the hassle and amend by April 15th to fix it.
Officially, you should amend. But if you don’t, nothing will probably happen. They’ll catch it for sure – they match up returns to the other paperwork they get – and might send you a bill for the extra tax. And if you get a bill for an extra $5 or $10 or so because of it, just pay it.