Tax season can be stressful, and it's easy to make mistakes in the rush to meet deadlines. Unfortunately, even small errors can delay refunds, result in penalties, or trigger an audit. Here are some of the most common errors taxpayers make on their returns and tips on avoiding them.
1. Incorrect or Missing Social Security Numbers
One of the simplest yet most crucial pieces of information on your tax return is your Social Security number (SSN). Incorrect or missing SSNs for you, your spouse, or dependents can cause significant processing delays.
Prevention Tip: Double-check all SSNs against official Social Security cards before submitting your return.
2. Math Errors
Miscalculations of income, deductions, and credits are frequent sources of errors. These can affect your tax liability or refund amount significantly.
Prevention Tip: Use tax preparation software which can help minimize these errors by automatically calculating totals. If you’re doing it manually, double-check all math with a calculator.
3. Incorrect Bank Account Numbers
For direct deposit refunds, an incorrect bank account or routing number can cause your refund to be delayed or deposited into the wrong account.
Prevention Tip: Triple-check your bank details before filing your return, especially if you enter them manually.
4. Filing Status Errors
Choosing the wrong filing status can affect which credits and deductions you’re eligible for, impacting your tax obligations or refund amounts.
Prevention Tip: Understand the criteria for each filing status. If unsure, use the IRS’s Interactive Tax Assistant tool to determine the appropriate status.
5. Unsigned Forms
An unsigned tax return is like an unsigned check – it’s not valid. Electronically filed returns require a PIN (Personal Identification Number) for a signature.
Prevention Tip: Ensure that you sign your return and include the necessary dates and PINs. If filing jointly, both spouses must sign.
6. Incorrectly Reported Income
Failing to report all income, including from side jobs or investments, can lead to penalties and interest on any additional taxes owed.
Prevention Tip: Gather all income documents such as W-2s, 1099s, and records of any other income before filing your return to ensure all income sources are reported.
7. Claiming Ineligible Deductions or Credits
Sometimes taxpayers claim deductions or credits they’re not eligible for, often due to misunderstanding tax laws.
Prevention Tip: Carefully review the qualifications for each deduction and credit. Consider consulting a tax professional if you're uncertain.
8. Incorrect or Expired ITIN
An Individual Taxpayer Identification Number (ITIN) is used by taxpayers who don’t qualify for an SSN. An expired ITIN can cause processing delays.
Prevention Tip: Check if your ITIN has expired and renew it if necessary before filing your tax return.
Conclusion
Avoiding common errors on your tax return starts with thorough preparation, careful review, and perhaps consultation with a tax professional. By taking these steps, you can ensure that your tax filing is as error-free and efficient as possible, helping to secure a swift refund and avoid complications with the IRS. LinkedIn:https://www.linkedin.com/company/brs-cpa-at-bookkeepingbrian-com
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