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As of January 23 the tax season is open and some of you already have all necessary information to file your 2016 tax return. Before you think you’re all ready to file your tax return, please take a moment to carefully consider the information bellow.
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Whether you are a do-it-yourself addict and use one of the soft programs available online, or you do it the old fashioned way on paper, or you fill out a tax organizer for your tax preparer, mistakes happen.
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There are a number of common errors and mistakes that taxpayers make more often than you’d think. Take some extra time whether you think you need it or not because, if you make an error or mistake on your return, then it will likely take longer for the IRS to process it. That could also delay your refund.
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- Here are some of the most common tax-filing errors to avoid:
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- Wrong or Missing Social Security Numbers. Be sure you enter all SSNs on your tax return exactly as they are on the Social Security cards.
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- Wrong Names. Be sure you spell the names of everyone on your tax return exactly as they are on their Social Security cards.
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| 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. |
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- Filing Status Errors. Some people use the wrong filing status, such as Head of Household instead of Single. If you e-file, tax software helps you choose.
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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.
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- Math Mistakes. Math errors are common. Tax preparation software does most of the math for e-filers.
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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.
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- Errors in Figuring Tax Credits or Deductions. Many filers make mistakes figuring their Earned Income Tax Credit, Child and Dependent Care Credit, and the standard deduction. For example, if you’re age 65 or older or blind, be sure you claim the correct, higher standard deduction.
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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.)
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- Incorrect Bank Account Numbers. Choose direct deposit for your refund. It’s easy and convenient. However, be sure to use the right routing and account numbers on your return.
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- Forms Not Signed. An unsigned tax return is like an unsigned check – it’s not valid. Both spouses must sign and date a joint return. You can avoid this error by e-filing your taxes since you must digitally sign your tax return before you send it to the IRS.
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- Electronic Filing PIN Errors. When you e-file, you sign your return electronically with a Personal Identification Number. If you know last year’s e-file PIN, you can use that. If you don’t know it, enter the Adjusted Gross Income from the 2015 tax return that you originally filed with the IRS. Do not use the AGI amount from an amended return or a return that the IRS corrected.
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- Health Care Reporting Errors. The most common health care reporting errors that taxpayers make involve failing to claim a coverage exemption and not reconciling advance payments of the premium tax credit. If you don’t have qualifying health care coverage but meet certain criteria, you might be eligible to claim an exemption from coverage and avoid an unnecessary payment when you file your tax return. If you enrolled in health coverage through the Health Insurance Marketplace and received advance credit payments, you must file a tax return to reconcile the advance payments made on your behalf with the amount of your actual premium tax credit.
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Make sure you 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 federal 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.
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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.
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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.
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Keep track of all your deductible expenses and have all adequate records (receipts, invoices, checks, etc.) in a safe place.
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| Attach all other necessary schedules and forms in sequence number order as shown in the upper right-hand corner. |
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| Use the correct mailing address as you find it on your tax form instructions. Use the right postage stamp on the envelope. |
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| 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. |
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| Make a copy of the signed return and all schedules for your records. |
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| 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. |
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Nevertheless, pay special attention to the figures you input there as well.
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| 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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