CARL WATTS & ASSOCIATES

January 13, 2014

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Mistakes to Watch Out
For When Filing Your
Tax Return
The tax time is upon us and, whether you do your own taxes or have a dedicated tax preparer to do the work for you, mistakes happen.

The IRS claims that the average tax return self-prepared will take an individual 21 ½ hours to complete -- this includes information gathering and understanding and preparing the return. You may do your taxes on paper, you may use one of the soft programs available online, you may fill out a form for the tax preparer, no matter the case, there are some common and, surprisingly, some most common-sense tax mistakes that taxpayers make more often than you’d think.

Here is a checklist to help you avoid common mistakes that may happen in any of the above cases:

Check for Spelling Mistakes and Double Check All Figures

Make sure you clearly print or handwrite your name, social security number, and address, including ZIP code, as well as the names of your family members exactly as those names and numbers appear on each person's social security card.


If you are married but filing a separate return, do not include your spouse's name in the name, address and social security number fields on the return.


One of the most common errors is an incorrect Social Security number, either for you or one of your family members. It may be just an accidental switch between two digits, but that’s enough to get you into trouble or to cause a delay with your tax refund.

The same could happen with the amounts on your W-2 or 1099 forms.

Also, check that you have all your W-2 forms from each of your employers and that you attach Copy B of each Form W-2 to your return. If you have more than one job, combine the wages and withholdings from all Form W-2s you receive and report those amounts on one return.

Make sure you report all your income. If you did some freelance work and didn’t receive a 1099-MISC, you still need to report that income on your return. Keep track of all your 1099s either for interest or dividends received and report the amounts on your tax return on the appropriate lines.

If you show a negative amount on your return, make sure you put brackets around it.

Make sure you check the right filing status, there could be quite a difference between a single person status and a head of household status.

If you have deductions, make sure they are all made in the respective tax year.

If you prepare your own taxes, make sure you don’t mix up deductions and credits, you cannot have both a credit and deduction for the same expense. Deductions reduce your taxable income, which is the number you have to calculate before figuring out your actual tax liability. Credits are a dollar for dollar reduction of your tax liability. (You may, for instance, qualify for an education credit of up to $2,000 and also an itemized deduction of up to $4,000 for college tuition and fees.)

Take your time and read the instructions in your tax booklet carefully. Many filers make mistakes figuring their Earned Income Tax Credit, Child and Dependent Care Credit and the standard deduction. For example, if you are age 65 or older or blind check to make sure you claim the correct, larger standard deduction amount.
Check out for computation errors in figuring the taxable income, withholding and estimated tax payments, earned income credit, standard deduction for age 65 or over or blind, the taxable amount of social security benefits, and child and dependent care credit. Also, missing or incorrect identification numbers for child care providers.

Make sure you keep track of your charitable gifts. Contributions over $200 require a letter from the charity to substantiate the deduction. Contributions in which something is received such as a dinner or merchandise can only be deducted to the extent the contribution exceeds the fair market value of goods or services received.

Make sure your employee-related expenses can be deducted. If they are related to employment, required by the employer and not reimbursed or reimbursable, then you should claim them on your tax return, but not claiming a reimbursement from the employer if it is available does not create a tax deductible expense.

Keep track of all your deductible expenses and have all adequate records (receipts, invoices, checks, etc.) in a safe place.

Attach all other necessary schedules and forms in sequence number order as shown in the upper right-hand corner.

Do not forget to sign and date the return on the appropriate line. If it is a joint return, make sure your spouse also signs and dates the return.

Use the correct mailing address as you find it on your tax form instructions.

Use the right postage stamp on the envelope.

If you are due a refund and requested direct deposit, check your financial institution's routing and account numbers.

If you owe tax, make sure you enclose a check or money order made payable to the "United States Treasury" with the return and include your name, address, social security number, daytime telephone number, tax form, and tax year on the payment.

Make a copy of the signed return and all schedules for your records.

You may want to consider filing your tax return electronically, this way many common errors may be avoided or corrected by the computer software. Depending on your income, you may even qualify to e-file for free by using Free File tax software. Nevertheless, pay special attention to the figures you input there as well.

Also, if you e-file your tax return, you will sign the return electronically using a Personal Identification Number. For security purposes, the software will ask you to enter the Adjusted Gross Income from your originally-filed previous federal tax return. Do not use the AGI amount from an amended previous return or an AGI provided to you if the IRS corrected your return. You may also use last year's PIN if you e-filed last year and remember your PIN.

Obviously, as we keep saying, the safest way is to enroll professional help with your taxes or any other dealings with the IRS.
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