Mistake on 2019 & 2018 returns, input 401A contribution as IRA

[jotax4-]

Found out this year 2021, that I made mistakes on 2019 and 2018 returns. Assume 401A was a retirement account for individuals and input as IRA; did not know that IRA is a standard account. Will need to amend these returns, will pay the different amount owed. The questions are: will I receive a penalty and interest on this amount owed? And is there a graph to estimate these charges? I believed the IRS would of caught my mistake, but did not and I did not  hear from them on 2019 and 2018 returns. 

[MinhT1 · Accepted solution]

Yes. Unfortunately, even this is a bona fide error, you will have to pay interest and penalties on the amount of taxes not paid in time.

Please read this IRS document on the way the IRS calculates penalties and interest.

[macuser_22 · Accepted solution]

Depends if you deducted it or not.     If deducted then it was deducted twice, once on your W-2 form and once as an IRA.

You don't calculate the interest and penalty if you owe additional tax, the IRS bills you for it separately.  Often the IRS waives the penalty and only charges interest.   Put your explanation on the 1040X in the reason form amending box.