As tax season approaches, taxpayers are reminded that using online tax preparation software can significantly reduce tax errors because the software performs all the math calculations, flags common mistakes, and prompts users for missing information. The Free File program is an excellent choice for those who wish to prepare and file their taxes for free using commercial tax preparation software.
For those who choose to pay someone else to do their taxes, be sure to use a reputable tax preparer (e.g., certified public accountants, enrolled agents or other knowledgeable tax professionals) to help avoid errors. The IRS's Preparer Credentials Check is a great tool to help find a reputable tax preparer.
Be sure to avoid these common errors when preparing your tax return as these can cause processing delays, which in turn may delay the issuance of any tax refund owed.
1) Missing or Inaccurate Social Security Numbers
Each SSN on a tax return should appear exactly as printed on the respective individual's Social Security card.
2) Misspelled Names
Each name listed on a tax return should match the name as it appears on the respective individual's Social Security card.
3) Incorrect Filing Status
Some taxpayers mistakenly choose the wrong filing status. The IRS's Interactive Tax Assistant can help individual's quickly choose the correct filing status, especially if more than one status is available. Using online tax preparation software also helps prevent mistakes with filing status.
4) Math Calculation Errors
Math errors are one of the most common mistakes on tax returns. These errors range from simple addition and subtraction mistakes to more complex calculation mishaps. Taxpayers should always double-check their math calculations, or better yet, use online tax preparation software because it automatically does the math for users.
5) Claiming Credits or Deductions
Taxpayers readily make eligibility mistakes when claiming certain tax credits and deductions, especially when it comes to the Earned Income Tax Credit, the Child and Dependent Care Credit, and certain deductions for charitable contributions. The IRS's Interactive Tax Assistant can help determine if a taxpayer is eligible for certain tax credits or deductions. When claiming a tax credit or deduction, be sure to attach any required substantiation forms or schedules.
6) Incorrect Bank Account Numbers
Direct deposit is the safest and fastest way for taxpayers to receive their tax refunds. But it is important for each taxpayer to review and confirm the bank account and routing numbers listed on their returns, especially if someone other than the taxpayer is preparing the return. Case-and-point, a large number of taxpayers did not receive their 2020 stimulus checks in a timely manner because of incorrect bank account and routing numbers reported on their tax returns.
7) Unsigned Forms
An unsigned tax return is not valid and will not be accepted by the IRS. Taxpayers can avoid this error by filing their return electronically and digitally signing it before sending it to the IRS. Remember, both spouses must generally sign a jointly filed return (exceptions may apply for members of the armed forces or other taxpayers who have a valid power of attorney).
8) Filing with an Expired Individual Tax Identification Number (ITIN)
The IRS will process a return filed with an expired ITIN, but it will not allow any credits and/or claimed exemptions applicable to the expired ITIN. However, it is important to still file the return by its applicable due date to avoid late-filing penalties and interest. Once the ITIN is renewed, any previously disallowed credits and/or exemptions will be reconsidered at that time.
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About the Author
Attorney Jordan D. Howlette is the President of MyTaxRights, LLC and the managing-member of JD Howlette Law, LLC, a civil litigation firm that represents individuals and businesses involved in tax disputes with the IRS, the United States Department of Justice (DOJ), and various state departments of revenue. A former trial attorney with the DOJ’s Tax Division, Jordan leverages his extensive background in tax litigation to educate others about their federal tax rights and responsibilities. Each tax season, Jordan also volunteers as a tax coach with the Center for the Advancement of Tax Equity, where he teaches others how to self-prepare and file their taxes through the non-profit's free tax clinics.