Tax question. Pleaae help.

[ILoveMoney]

I received a letter in the mail yesterday saying I owe $3700. Yikes! I made a big mistake on my 2010 taxes. I accidently put that I made $2990 instead of $29990. I also made another mistake. I put that I paid $11000 for school and it was really $23000.

My question is, how can I fix the second mistake (correcting the amount I paid for school)? If thats fixed, will it help to lower the amount I owe?

Thanks for the help!

[Dido]

You can file an amended return (1040X), but it won't help. The maximum education credits top out at 2000 for the lifetime learning credit (20% of up to 10,000 tuition) or 2500 for the american opportunity credit (100% of the first 2000 of tuition, 25% of the next 2000 of tuition). You already reported spending more than 10,000 in tuition so this won't help you. Also, if you received any employer reimbursements for the education, you have to subtract those from the tuition received in order to receive any of the credit.

If you can't afford a professional tax preparer and your income is still in about the range listed, look into the VITA (volunteer income tax assistance) program in your area. Volunteers are trained by the IRS and provide assistance to taxpayers generally making under $40,000, as long as the returns aren't too complicated. That will help you avoid such errors in the future.

[ILoveMoney]

^thank you dido!

[SnoopyCool]

Take it to a professional to look-over and make sure that your entire tax situation is accounted for. It's likely you don't owe that much, but be sure. I say this because I work for a large tax preparing company, and see a multitude of IRS letters each year. Usually, the case is that the IRS inflates what you acutally owe.

[ILoveMoney]

^^^thank you snoopycool! I will do that ASAP.