(MONEY Magazine) – Oops. you mailed your tax return two months ago and, son of a gun, you just found an unopened year-end statement reporting $400 in dividends at the back of a desk drawer. Or perhaps you suddenly realize that you forgot to claim the child-care tax credit on your '95 return, which could have saved you $480. Or maybe you'll soon hear on the news that Congress has changed the tax law--retroactively. That last one is a real possibility this year. A provision that made tuition reimbursement from your employer nontaxable expired at the end of 1994, and legislators are talking about reinstating it retroactively this year. If they pass such a law, the more than 1 million employees who already paid tax on their '95 tuition reimbursement will owe less in taxes than they gave to the Internal Revenue Service.

But if you're expecting the IRS to set things straight for you, forget it. The responsibility for correcting your 1995 return is yours. Fortunately, though, the task is pretty easy--you just need to file what's called an amended return: the 1040X. It's only one page (okay, two sides of one sheet), and filling it out could win you a tax refund or minimize the penalties you'll pay on late taxes. Below, I'll answer the most commonly asked questions about amended returns, so you'll know when and how to inform the IRS that your 1040 was really only a first draft.

--Under what circumstances should I amend my return? Oversights and tax-law changes aren't the only reason to amend tax returns. Late-arriving documents also can necessitate a second filing. For example, after you sent in your tax return, you might have received an amended Form 1099 from your mutual fund, reclassifying, say, $300 of your $1,500 in taxable ordinary dividends as a nontaxable distribution. In that case, you'd almost certainly want to file a correction because the government would owe you money--$84 if you're in the 28% bracket.

The tougher question is: Should you amend your return if it will mean forking over cash to Uncle Sam? Or, more to the point, if you ignore the problem, what are the odds the IRS will ever notice? If the error involves income reported on a Form W-2 from your employer or a 1099 from a financial institution, you can count on an IRS computer spotting the omission. Amending before you're "caught" will reduce the interest you owe on the tax due as well as let you avoid an almost certain negligence penalty of 20%. The government's current interest rate on overdue balances is 8%. If you are reluctant to amend because you don't have the cash to pay the tax due, just attach Form 9465, asking the IRS to let you make installment payments.

In other instances, only an IRS audit will bring your error to light. That's the case if, for example, you made a simple mistake based on something that didn't require including documentation with your return--like accidentally deducting the same charitable contribution twice. Also common: forgetting to report income, such as tips, that you earned off the books. In those situations, fessing up is largely a matter of conscience.

--How do I correct my return? Get a Form 1040X mailed to you by calling 800-829-3676; get it faxed by calling 703-487-4160, or download it from the World Wide Web (at http://www.irs.ustreas.gov). Filling out the form yourself will save you the $75 or more you'd pay a tax pro to do it. If the mistake was caused by your preparer's error, however, he or she should correct your return for free.

To recompute your tax liability, enter your old and new income figures in columns A through C on the front side of Form 1040X. Suppose, for example, that Congress reinstates the tuition-reimbursement exclusion and you originally reported an adjusted gross income (AGI) of $65,000. Then your employer sends you a corrected Form W-2, excluding $5,250 in tuition reimbursement from wages. Record the $65,000 you originally reported on line 31 of your 1040 in column A. In column B, enter the decrease in your AGI as a negative figure ($5,250). Then subtract $5,250 from the amount in column A, and write the corrected AGI ($59,750) in column C. Don't forget to recompute any taxable Social Security benefits, as well as deductions such as medical expenses that are limited by a percentage of your AGI. To do these calculations, you'll need to refer to your original tax return.

Explain the fixes you are making on the flip side of the 1040X, in the section labeled Part II. Because the IRS decides whether to accept or deny your change based on your explanation, be as clear and complete as possible.

--What documents should I attach? Include the same ones that you'd need to file your original tax return. For example, if you are changing the amount of your 1995 wages, attach the federal copy of your corrected Form W-2 to the front of the Form 1040X. If you are amending the return to claim fresh itemized deductions, attach Schedule A. Also include any form used to compute a new tax credit or additional tax.

--What if I'm married? If you filed a joint return, you and your spouse must file a joint amended return. But if you and your hubby filed separate returns for '95, one spouse may not amend the separate return of the other, unless he or she is named as fiduciary upon the death or guardianship of the other spouse.

--How long do I have to amend? In general, you have three years after the original return was due or filed, or two years from the date the tax was paid, whichever is later. Failure to file an amended return within this time generally prevents you from receiving a tax refund, no matter how valid your claim. There are exceptions: For instance, if your deduction or loss involves a bad debt or worthless stock, you have seven years to file an amended return. For information on deadlines, call your tax adviser or your local IRS help line, listed under the U.S. Government section of the White Pages.

--Will I earn interest on any money I get back from the IRS? If the IRS fails to issue a refund within 45 days of when your return was amended, it will pay interest for the period from the due date of the original return--April 15--to the date the refund is paid. The current rate is 7%. Maybe that will interest you in making amends.

A tax lawyer and former IRS audit group manager, Mary L. Sprouse has prepared more than 1,500 income tax returns.