Solutions to Make Better Decisions with Your Money

Don’t Make These Mistakes on Your Tax Return

Don't Make These Mistakes on Your Tax Return

Are you getting ready to prepare and file your tax return?

Don’t make these mistakes!

Errors on your tax return can delay the processing of your return, in addition to, the tax refund you’re counting on.

Fortunately, many of the most common mistakes are simple, human errors that have little to do with the complicated tax code.

Spending a little extra attention to a few things will make tax time a much smoother and error-free process.

Using do-it-yourself tax preparation software solutions drastically reduces the chance of errors, especially if you import last year’s return information.

However, all taxpayers, should be double checking a few key pieces of information on their returns.

To help you file an error-free tax return the first time, every time, the following are common errors and why they matter:

Names not matching Social Security cards

Believe it or not, names are one of the top reasons returns are rejected by the IRS. More common than misspellings is dependent names not matching their Social Security cards.

The IRS database syncs with the Social Security Administration’s. If the IRS computer system can’t locate a name on your tax return in the SSA’s database, it will reject your tax return.

Though easy to fix, your return won’t be processed until the correction is made.

Entering an incorrect Social Security Numbers

Another common mistake is incorrect Social Security Numbers (SSN). If any of the SSNs on your return are incorrect, the IRS will reject your return.

Besides the hassle of fixing and resubmitting your return, there’s another reason to get SSNs correct the first time.

Several tax breaks, such as the Child Tax and Additional Child Tax credits and education and dependent care credits require correct SSNs.

Forgetting to include incomes

If you forget to include income on your return, the IRS will let you know, and depending on when your oversight is discovered, you also could owe penalties and interest on the unreported earnings.

The agency knows how much income was deposited into your bank and investment accounts based on your SSN and 1099 forms financial institutions submit to the IRS.

Not including tax deductions and credits

There are hundreds of tax deductions and credits available for the taking. If you miss one on your tax return, the IRS isn’t going to tell you.

There’s a simple solution for this – use tax preparation software. The program will help you get every tax break you deserve. It walks you through every credit and deduction by asking simple questions.

Claiming the wrong filing status

Because filing status determines many amounts on tax returns, the IRS has strict qualifying criteria for each of the five filing statuses.

Choose the incorrect status and the IRS will reject your return. Tax preparation software will guide you through your options and help you choose.

If you qualify for more than one status, claim the one resulting in the bigger refund or less tax owed.

Math errors

If using tax preparation software, you don’t have to worry about this one.

The most common error on tax returns, year after year, is bad math.

Mistakes in arithmetic or in transferring figures from one schedule to another will result in an immediate correction notice.

Math errors also can reduce your tax refund or result in you owing more tax than you should.

Incorrect routing and account numbers for direct deposit

If you choose to have your refund direct deposited into one or multiple accounts, check the routing and account numbers entered into your return.

Just one incorrect number can mean several extra weeks of waiting for your refund, someone else receiving your refund, or your refund being sent back to the IRS.

Missing the April 15th tax return deadline

The last mistake is very simple to avoid. File your tax return on time. If you need more time, file Form 4868 by April 15 for an automatic six-month filing extension.

Just remember you’re still required to pay taxes owed by April 15 or incur late-filing penalties and interest fees.

If you can’t afford to pay what you owe, the IRS offers help. Call the agency to discuss installment plans, payment options, extended time to pay and other assistance.

File your Taxes Now using TaxACT

Photo credit: ktpupp via photopin cc

Subscribe to the TaxACT blog and take ownership of your finances!




Take the conversation further...
We'd love to know your thoughts on this article. Meet us over on Facebook, Google+ or Twitter