Tax preparation software calculates these items for the taxpayer but it’s always a good idea to double check its accuracy before submitting a return for filing.
Filing a tax return can be intimidating, especially when considering the complexity of tax law. However, some of the most common errors on tax returns are simple and can be avoided by using tax software or a reputable tax preparer. Optima Tax Relief discusses some of the most common tax return errors that taxpayers make when filing each year.
Filing too late or too early
Most taxpayers are aware of the tax deadline each April. While it’s important to file on time, taxpayers should also be sure not to file too early, especially if they have not received all the necessary tax documents needed to file. Filing prematurely can result in mistakes on tax returns and processing delays.
Entering simple information inaccurately
Taxpayers should confirm that the Social Security numbers and spelling of names listed on their returns are correct. In addition, figures like wages, dividends, interest and other income should be entered carefully.
Making simple math errors
Some of the most common mistakes on tax returns are simple math errors. Taxpayers should double check their math if doing calculations themselves. The best way to prevent simple math errors is to use tax preparation software, which flags common errors.
Choosing the wrong filing status
In some cases, a taxpayer can qualify for more than one filing status. They can confirm the correct filing status by using the IRS’s Interactive Tax Assistant online tool or by using a tax preparation software and answering a few questions about marital status, dependents, living situation, etc.
Incorrectly calculating credits or deductions
Tax preparation software calculates these items for the taxpayer but it’s always a good idea to double check its accuracy before submitting a return for filing. The online IRS Interactive Tax Assistant can also help a taxpayer determine their eligibility for tax credits and deductions after answering a few questions.
Entering the wrong bank information
Bank account and routing numbers are required when setting up direct deposit for tax refunds. Taxpayers should confirm that each number is correct to avoid delays in receiving their refunds.
Forgetting to sign tax return forms
A tax return form is not valid until it is signed by each individual listed on the return, unless the taxpayer is a member of the armed forces or has a valid power of attorney on file. The easiest way to avoid this common mistake is to e-file and digitally sign the tax return.