Unless you’ve been under a rock for the past several years, you know that this time of year is tax season. If you haven’t already filed your 2015 income tax return, of course you’ve got some work ahead of you. Unfortunately filing your tax return often results in errors – and these can be quite costly in terms of delays in processing as well as potential penalties and interest if your error results in underpayment of tax.
In addition, an error on your return could result in missing out on refunds or credits that you are entitled to.
Recently the IRS issued Tax Tip 2016-42, which lists out 9 common filing errors that they see, and tips to avoid the errors. The actual text of the Tip follows:
Avoid Errors; File an Accurate Return
The IRS encourages you to file an accurate tax return. Take extra time if you need it. If you make an error on your return then it will likely take longer for the IRS to process it. That could delay your refund. You can avoid many common errors by filing electronically. IRS e-file is the most accurate way to file your tax return. Seven out of ten taxpayers can use IRS Free File software at no cost.
Here are nine common tax-filing errors to avoid:
1. 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.
2. Wrong Names. Be sure you spell the names of everyone on your tax return exactly as they are on their Social Security cards.
3. Filing Status Errors. Some people use the wrong filing status, such as Head of Household instead of Single. The Interactive Tax Assistant on IRS.gov can help you choose the right status. If you e-file, tax software helps you choose.
4. Math Mistakes. Math errors are common. Tax preparation software does the math for e-filers.
5. 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. If you’re not e-filing, follow the instructions carefully when figuring credits and deductions. For example, if you’re age 65 or older or blind, be sure you claim the correct, higher standard deduction.
6. 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. The fastest and safest way to get your tax refund is to combine e-file with direct deposit.
7. Forms Not Signed. An unsigned tax return is like an unsigned check – it’s not valid. Both spouses must sign 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.
8. 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 2014 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.
9. 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.
Each and every taxpayer has a set of fundamental rights they should be aware of when dealing with the IRS. These are your Taxpayer Bill of Rights. Explore your rights and our obligations to protect them on IRS.gov.
Additional IRS Resources:
IRS YouTube Videos:
- Welcome to Free File – English
Sterling Raskie, MSFS, CFP®, ChFC®
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Well even though I didn’t make any of the errors you mentioned, I did make one error that I probably have to go back and correct which may result in having to pay back some money. I have an error on one of my IRA’s,. The bank charges me for an IRA they set up and in which they choose the investments and charges me quarterly for. I claimed the charges as 2% of my setting up in the last deductions on my income but recently discovered that it is not deductible because it is in an IRA. But someone else also told me that if pay the charges myself it might but I still haven’t heard from the individual I asked about it so I don’t know how it works. My medical status still doesn’t allow me to get that previous error corrected at the moment so I don’t know just what to do about it at the moment. \\