Legal Law

7 Common Tax Return Mistakes and Mistakes to Avoid

The risks of making avoidable tax mistakes, especially around the tax filing deadline, are often high, some with negative consequences that can even lead to a tax audit or unnecessary delays in return processing. Here are seven such errors that can be avoided by simply double-checking completed returns before submitting them to the IRS:

1. Wrong Social Security Numbers: Make sure all Social Security numbers, whether for yourself, children, spouse, or dependents, are correct. The IRS has rated this as the most common return error and therefore you should double check it. This must be done whether you are filing on paper or online.

2. Name errors: Be sure to use your own name, especially if you are married filing separately instead of your spouse’s. Make sure the name on the statement matches the name on your Social Security card. Contact the Social Security Administration for a new card if there is any change in name(s).

3. Incorrect/Multiple Fill States: You can only file one return under one filing status at a time. Although online tax preparation software does not accept multiple selections of filing statuses, it is common for those who file paper to check more than one status at a time. Make sure this doesn’t happen.

4. Signature of all signature areas: Your tax return is only valid if it is signed accordingly by all relevant parties. If you are filing a joint return, make sure your spouse signs as well, as failure to do so can lead to delays or even rejection of the return altogether.

5. Math errors: Mathematical errors are common, especially when manually calculating the amount of tax due. Avoid this by using only the most current version of the tax tables, check the math and make any necessary corrections.

6. Claim of Credits and Deductions: Regulations for IRS credits and deductions are constantly changing each year, and you should check to make sure you qualify for some, like the Earned Income Credit, which is calculated based on gross income before you claim. The same applies to deductions, some of which are age-specific. To avoid delays in processing your return, only claim the credits and deductions to which you are entitled.

7. Routing and account numbers: Most taxpayers requesting refunds prefer IRS direct deposits, which may only be possible if you provide accurate routing and bank account numbers. It is very easy to correct this error; just review the details before applying.

Finally, don’t hesitate to request a tax filing extension if you can’t file on time. This will ensure that you not only avoid common tax mistakes, but also IRS interest and penalties.

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Peoria - The Jewel of Illinois

February 12, 2022