What to do if a tax document arrives after you file
In early 2019, I thought all of my tax documents had arrived in the mail, so I sat down to file my taxes in early March. Everything looked great, so I submitted my return to the IRS and went on about my merry business.
In early April, however, an unexpected document popped up in the mail. It was a 1099 form for a very small amount of freelance work I had done the previous year and forgotten about. For whatever reason, the document hadn't been sent to me until fairly close to that year's tax deadline.
This was an unhappy situation, to be sure. Would I be hit with any expenses or interest charges? What documents do I need to file? Should I just "pretend" I didn't see it? (Quick answer to that last one: No.) Here's what you need to know about situations like these.
Why would this happen?
Most of the time, people receive all of their tax documents by early February and move on to file their income taxes with the IRS by the filing deadline (mid-April in most years, mid-May in 2021). However, that path isn't always smooth. There are a few reasons why you might not receive a tax document until after you've already filed your taxes.
One common reason is that it may have actually been lost in the mail. If an item is not delivered properly and gets lost in the mail system, it can show up weeks or months after it was sent.
Another reason is that the person or business preparing the tax document was delayed in their preparation. Most larger businesses have accounting services that do this very efficiently on their behalf, but some businesses may try to tackle this on their own. If a business fails to get their own paperwork organized and filed, then they may fail to get your tax documents to you efficiently as well. The IRS deadline for sending most tax documents to individuals is Jan. 31, but businesses can and do fall behind that deadline, and that can result in documents arriving at your doorstep quite late.
Am I in trouble?
If this happens to you, you are not immediately in any sort of trouble. You committed no fraud and did not intentionally miss any deadlines. The IRS is actually very flexible and forgiving in these types of situations.
However, once you have the document in hand, you can't ignore it. The IRS is likely aware of the situation, as the person or business that sent you the tax document has very likely also filed it with the IRS directly. The only reason they wouldn't contact you is if they simply happen not to notice it. Furthermore, the longer you sit on the document, the more likely it becomes that you'll face fines and other penalties.
What happens if you do ignore it? No matter what, you are committing tax fraud. The question is whether the IRS happens to notice the fraud. Your best approach is to handle it immediately, as that will minimize and likely eliminate any late charges and penalties.
Your best approach with the IRS is always to take action immediately on your own behalf to set the record straight. Follow the steps below as soon as possible so that a tax mistake due to someone else's negligence doesn't turn into your own tax fraud. If you wait, you might not be noticed by the IRS, but if they do notice you, you'll face many difficulties and tax penalties.
How to handle a late tax document
Ideally, you've received the tax document before the IRS has contacted you about it. In that situation, the process is pretty straightforward. You simply file IRS 1040-X, which amends your tax return with updated information. If you used tax filing software such as TurboTax, this is done very easily within the software. If you used a tax preparer, simply contact your tax preparer immediately.
If the new tax documents indicated that you earned more income than you initially reported, this may result in you owing more taxes. Don't worry — the amount of actual tax you owe will always be just a relatively small percentage of the new income you're reporting. Don't fear a higher tax bracket, as it doesn't mean you'll suddenly owe a ton more in taxes. If the additional amount you owe is trivial, simply pay it. If it is enough that it may cause you hardship, you will want to contact the IRS directly to discuss your options.
In some situations, particularly if you receive the tax document far past the filing deadline, you may be subject to additional fines or charges. In that situation, contact the IRS directly. You may be eligible to file Form 843, which will request a waiver of those fines. Again, the IRS is flexible with those who are proactive about paying the taxes they owe and will often waive fines in situations outside of your control.
How I handled late tax documents
How did I handle my own late document? The IRS had not yet contacted me about it, so I quickly filed a 1040-X form along with a small additional tax payment (as the late form showed additional income that I hadn't filed originally). There were no charges involved and the IRS never contacted me about it in any way. The process was simple and took less than 30 minutes. I spent more time worrying about it than it actually took to resolve the situation.
If I had waited to file the document, the IRS may have contacted me about it. In that situation, I would have owed the taxes, as well as potential interest on the unpaid taxes and other penalties as well. Simply taking care of it immediately and paying the taxes I actually owed made it into a minor issue.
Too long, didn't read?
If you receive a late tax document, don't panic! Simply fill out IRS 1040-X as soon as possible. It's a simple form and won't take long most of the time. If you do owe enough taxes that it's problematic for you, or you're facing penalties due to too much time elapsing, contact the IRS. They can help you with a payment plan or help you get the penalties waived. The IRS is very likely to help if you are proactive and act on your own behalf sooner rather than later.