Thomas Bridgman

In addition to mortgage interest, points (prepaid interest), and PMI (mortgage insurance), you can also deduct your property taxes.

Home energy credits are also available, although the 2011 general credit is only worth $500 (lifetime).

If you don’t file a tax return, the IRS will calculate a substitute return for you, based on the information it knows. if you owe taxes based on this substitute, the IRS will send you a letter and a bill. If you don’t get such a letter, the IRS thinks you are due a refund (or you’ve moved and the IRS can’t find you).

Once you file your late return, if you owe the IRS, you will also owe a late filing penalty plus interest on the amount due. If you are due a refund (even if the IRS originally calculated a balance due on their substitute return), it is extremely unlikely they will charge a penalty for being late.

Just because the IRS or your state has not caught the mistake as yet does not mean they won’t.

You are legally obligated to file an amended return if you owe more tax than was shown on the original return. Common cases would include not reporting income you received, claiming deductions or credits to which you were not entitled, or claiming a filing status you were not eligible to use. You are almost always better off fixing the mistake yourself rather than waiting for someone to catch it and fix it for you.

You will owe the additional tax that should have been paid, plus interest from the due date of the return. In some cases, you might also be subject to a penalty. Make sure you check whether an amended state return is necessary as well.

If the mistake means you paid more taxes than you should have, you obviously want to amend the return to get the excess money back.

Bear in mind you have a limited amount of time to file an amended return (generally 3 years from the original due date of the return), and that some changes may affect your federal return but not your state or vice versa.