Preparing to file your federal tax return? Review some common mistakes people make and how you can avoid them this tax season.
Making a mistake on your tax return can slow down its processing and even delay your refund. If the IRS spots any errors, they may reject your return, requiring you to correct the issue and resubmit it promptly. Many common tax return mistakes are simple human error, unrelated to the complex tax laws provided.
By paying a bit more attention and double checking your information, you can make tax season smoother and error free.
Let’s review some common mistakes and ways to resolve them.
Don’t miss out on tax deductions and credits…
There are various tax deductions and credits, such as the Earned Income Tax Credit, that can help lower your tax liability and even increase your tax refund. However, if you overlook a specific tax break on your return, the IRS won’t notify you what may have been missed. Be diligent in reviewing all deductions and credits.
Hiring a tax preparer will further help in finding the best deductions and credits for you.
Providing incorrect Social Security information…
A recurring error is entering your Social Security Numbers (SSNs) incorrectly. If your SSNs on your tax return are wrong, the IRS will decline it. Many tax benefits available, like the Child Tax Credit, education credits, or Child and Dependent Care Credit, depend on accurate SSNs. Make sure when filing your return you double check all SSNs for typos or inconsistencies.
Names do not match up with Social Security cards…
Surprisingly, one of the main reasons the IRS will reject tax returns is due to a name mismatch. While misspellings can occur, the primary issue is when a dependent child’s name doesn’t match the name on their Social Security cards. The IRS database is synchronized with the Social Security Administration (SSA). Therefore, if the IRS system can’t find a specific name on your tax return in the SSA’s database, it will outright reject the return. Although this is an easy fix, your return will not be processed until the correction is made.
Not entering your income…
If you accidentally omit your exact income on your tax return, the IRS will notify you. They track income deposited into your bank and any investment accounts using your SSN and tax forms. If a mistake is found, you might owe penalties and interest on that unreported income. Therefore, it is wise to double check that all your income is reported properly before filing your return.
Choosing an incorrect filing status…
The IRS determines many tax deduction amounts, including the standard deduction, based on filing status. Therefore, it’s crucial to meet the strict criteria for each status. Your options include:
- Head of household
- Married filing jointly
- Married filing separately
- Qualifying widow or widower
Choosing the wrong filing status will result in the IRS denying your return. Sometimes, you may qualify for more than one status. In such cases, select the one that offers a larger tax refund or a lower tax payment.
Work with your tax preparer to make sure you choose the correct status.
Check out this article for more information: “What is my filing status?”
Math Problems in your tax return…
One of the most frequent mistakes on tax returns is incorrect calculations. Errors in your math or transferring numbers between forms can lead to an immediate correction notice from the IRS. These math mistakes might also reduce your tax refund or cause you to owe more than necessary.
Your tax preparer should be able to spot these errors for you, but make sure you are double checking your work for a better experience with your appointment.
Failing to meet the April tax return deadline…
The final tax return mistake is easy to avoid: ensure you file your tax return on time. If you need more time, submit Form 4868 by April 15 to get an automatic six month extension.
Keep in mind that you still need to pay any taxes owed by the Tax Day deadline (usually April 15) to avoid late filing penalties, interest, and fees. If you can’t afford to pay the full amount, the IRS offers payment plans.
Check with your preparer for more information.
Incorrect account numbers or routing information for direct deposits…
If you opt for a direct deposit of your refund into one or multiple banking accounts, make sure you double check the bank account numbers you enter. Even a single incorrect digit can lead to several extra weeks of waiting for your refund, someone else receiving your tax refund, or your refund being returned to the IRS.
The key to a quick and efficient tax year is to work with your tax preparer to help resolve any mistakes. Double check your information and verify all data to have a successful tax season.
This blog post serves as informational content and does not constitute legal or financial advice.