Smart Money: Common tax mistakes to avoid

Smart Money with Chris Harper

Some common tax mistakes to avoid:

Clerical errors

  • Taxpayers using incorrect Social Security numbers is a common error identified by the IRS. These must be accurate for the taxpayer, spouse and all dependents.
  • Also note that your return will be rejected by the IRS if a dependent has already been claimed by someone else.
  • Misspelled names also create problems. Names should match what is listed on an individual’s Social Security card.

Math errors

  • Math errors are another major reason that the IRS sends notices regarding tax returns.
  • Using the incorrect tax table or interpreting the tax tables incorrectly will cause errors in your tax computations.
  • We recommend filing electronically using a preparer, a reputable software or via the IRS (www.irs.gov/freefile).

Incorrect filing status

  • Filing status is a fundamental component of a taxpayer’s income tax return.
  • Claiming an incorrect filing status (e.g. Head of Household instead of Single) will alter the tax liability.
  • The IRS Interactive Tax Assistant (https://www.irs.gov/uac/interactive-tax-assistant-ita-1) is a useful tool for determining the proper filing status and other tax considerations.

Direct deposit errors

  • Direct deposit is the fastest, safest and most convenient method for receiving an income tax refund.
  • Triple check the routing number and bank account number for direct deposit of your refund.
  • Incorrect bank information will create a significant delay in the receipt of your tax refund.

Did the IRS receive your tax return?

  • Ensure that you file by the due date (April 18) or file a request a six-month extension.
  • Be sure that you sign and date your return.  If you are married, your spouse must also sign the return.  An unsigned return is the same as a non-filed return.
  • Include sufficient postage.  It is wise to have the post office weigh your envelope to ensure proper postage.
  • Consider sending your return via certified mail with a return receipt requested if you file a paper return.
  • Double check to ensure that you are sending your return to the proper address listed in the tax return instructions.
  • Did you attach required documentation such as Forms W-2?
  • Strongly consider electronic filing to eliminate many of the concerns involved with filing paper returns.
  • Don’t forget to file your state and city returns when you file your federal tax return.

Courtesy: Chris Harper,  www.hungerfordnichols.com

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