What must I do if I omitted stock trade transactions on my tax return?

JimiGood · #1 (**permalink**) 03-05-2007, 10:37 AM

I already filed my 2006 tax return and made a mistake by omitting a stock trade transaction that resulted in a $14,000 capital gain!

I am worried and dont want to get in trouble..I am ready to do anything, but please advise me what I have to do.

Thanks.

TaxGuru · #2 (**permalink**) 03-06-2007, 09:29 AM

There is nothing really to panic here, though if you don' take action, you could end up paying penalties and interest on under-eporting taxable income.

The best approach usually is to voluntary file an Amended tax return! Gnerally, I have found that the IRS wld not assess any interest and penalties if you file an amended return before a tax notice is sent you.

I would recommend that you approach a CPA near you and have him file an amended return, this tax form is called Form 1040X! This form is really a little complicated so I woud avoid filling out manually and let a CPA fill out, it may cost you between $125 to $175 depending on the state you live!

But, please take immediate action on this!