CARL WATTS & ASSOCIATES

April 16, 2018

Troubles viewing this message? View in browser online here
Mistakes Will Happen
With the April 17 tax deadline upon us, many of you may rush to finish your tax returns and make more errors which you could easily avoid. Errors can mean longer processing times and possible tax refund delays. Electronic filing is the best way to avoid common mistakes; it is also the most accurate way to file a tax return.


We usually do this at the end of our every newsletter, but we’ll make an exception this time, so here it is: using the services of a trusted tax professional will certainly help you avoid any mistakes and make sure you get all the credits you are entitled to and avoid paying more taxes than necessary.

If you’re still the do-it-yourself kind of person, here are some common errors to avoid when preparing a tax return:

Missing or inaccurate Social Security Numbers. Be sure to enter each SSN on a tax return exactly as printed on the Social Security card.

Misspelled names. Spell all names listed on a tax return exactly as listed on the taxpayers’ Social Security cards.

Filing status. Some taxpayers claim the wrong filing status, such as Head of Household instead of Single. The Interactive Tax Assistant on IRS.gov can help you choose the correct status. E-file software also helps prevent mistakes.

Math mistakes. Math errors are common, ranging from simple addition and subtraction to more complex items. Figuring the taxable portion of a pension, IRA distribution or Social Security benefits is more difficult and results in more errors. You should always double check your math. Better yet, tax preparation software does it automatically.

Figuring credits or deductions. You can make mistakes figuring your Earned Income Tax Credit, Child and Dependent Care Credit, the standard deduction and other items. Follow the instructions carefully. For example, a taxpayer who’s 65 or older, or blind, should claim the correct, higher standard deduction, if not itemizing.

Incorrect bank account numbers. If you are due a refund, you should choose direct deposit for ease and convenience, but the IRS cautions taxpayers to use the right routing and account numbers on the tax return.


Unsigned forms. An unsigned tax return isn’t valid. Both spouses must sign a joint return. You can avoid this error by filing your return electronically and digitally signing it before sending it to the IRS. Taxpayers who are using a tax software product for the first time will need their adjusted gross income from their 2016 tax return to file electronically. If you are using the same tax software you used last year usually will not need to enter prior-year information to electronically sign their 2017 tax return.

Filing with an expired ITIN. The IRS will process and treat as timely a return filed with an expired Individual Tax Identification Number, but won’t allow any exemptions or credits. Taxpayers will receive a notice explaining that an ITIN must be current before the IRS will pay a refund. Once you renew the ITIN, the IRS will process exemptions and credits and pay an allowed refund. ITIN expiration and renewal information is available on IRS.gov.
You can steer clear of common tax-filing mistakes by following these helpful tips:

File electronically. Filing electronically reduces tax return errors, as the software does the calculations, flags common errors and prompts taxpayers for missing information.

Mail a paper return to the right address. If you are a paper filer, you should check IRS.gov or their tax form instructions for the appropriate address where to file to avoid processing delays.

Take a close look at the tax tables. When figuring tax using the tax tables, you should be sure to use the correct column for the filing status claimed.

Fill in all requested information clearly. When entering information on the tax return, including Social Security numbers, take the time to be sure it is accurate and easy to read. Also, check only one filing status and the appropriate exemption boxes.

Review all figures. While software catches and prevents many errors on e-filed returns, math errors remain common on paper returns.

Find adjusted gross income. If you changed your tax software product, you may be asked to enter your prior-year adjusted gross income to validate your Self- Select PIN. Taxpayers who did not retain a copy of their prior-year return may have to use Get Transcript Online or Get Transcript by Mail to obtain their prior- year AGI.

Attach all required forms. Paper filers need to attach W-2s and other forms to the front of their returns that reflect tax withholding.


If requesting a payment agreement with the IRS, also attach Form 9465, Installment Agreement Request, to the front of the return. Attach all other necessary schedules and forms to the upper right-hand corner of the tax form in the order shown in the instructions.

  • Keep a copy of the return. Once ready to be filed, you should make a copy of your signed return and all schedules for your records.

A failure-to-file penalty may apply if you do not file by the tax filing deadline and if you did not pay all of the taxes you owe by the tax filing deadline.

The failure-to-file penalty is generally more than the failure- to-pay penalty. You should file your tax return on time each year, even if you’re not able to pay all the taxes you owe by the due date. You can reduce additional interest and penalties by paying as much as you can with your tax return. You should explore other payment options such as getting a loan or making an installment agreement to make payments.

On the other hand, if you're owed a refund and you don't file your taxes by Tuesday, you will not get a penalty. But, if you wait to file your taxes because you think you are getting a refund and then find out you miscalculated and actually owe money, interest and penalties will have accrued on your debt by the time you do file. So, good luck and be careful and safe!


TOP
Repeated issues with image download?
This may be helpful.
Click here !
www.carlwatts.com
office@carlwatts.com
Washington DC
tel/fax 202 350-9002