10 common tax-filing mistakes to avoid
October 13, 2009 · Tagged with Taxes
Completing your tax return is like walking through a financial minefield. A miscalculated amount here, a wrong tax ID number there, and boom! Suddenly, instead of getting a check back from Uncle Sam, you have to write one to the U.S. Treasury.
Even if the error doesn’t end up costing you any real dollars, it could delay the receipt of any refund you’re expecting.
Many people try to reduce the possibility of filing errors by turning their returns over to tax professionals or using computer software. But even in these cases, a close review of your return is critical. In the final inspection you might find something that slipped by you on the computer screen or that your accountant entered incorrectly. Such scrutiny is important since you bear the ultimate responsibility for your tax bill.
10 COMMON TAX MISTAKES
Making math blunders
Far and away, says the IRS, the most common mistake on tax returns is bad math. Numbers are transposed, left out or totaled incorrectly. And since a total figured on one tax form or work sheet often is transferred to another form (or forms), that one simple mistake could quickly compound into a very costly miscalculation.
Even if you use tax software, you’re not off the hook. Sure, the computer program will do the figuring for you, but if you put the wrong numbers in to begin with, the machine won’t catch that. So double-check your entries, whether on paper or on your PC.
Entering wrong ID numbers
These nine-digit identifiers are crucial to tax forms. Write your Social Security number correctly and clearly on each page of your tax return. If you’re married and filing jointly, be sure that your spouse’s Social Security number is entered correctly, too.
Don’t forget about your dependents, be they your children or an older relative for whom you’re financially responsible. An incorrect Social Security number in any of these cases could delay your refund or cause the IRS to nullify some credits you might claim.
Your Social Security number also shows up on various income documents, from your W-2 form to investment and savings account statements to retirement plan contribution reports — and the IRS gets copies of all of these. Tax examiners will be looking at each of these documents closely, both the amounts earned and the taxpayer’s ID number.
Ignoring IRS material
More than 73 million people filed electronically this year. But almost 63 million others sent in paper forms. If you still fill out your return by hand, use the label preprinted with your name and address along with the envelope that comes with your tax packet to send in your form.
Your address label will help IRS employees more easily read your personal information. Even if it’s not correct because, for example, you moved, use it and simply cross out the wrong information and correct it by hand.