7 common mistakes when filling out a U.S. tax return
The idea of delaying filing a tax return until the deadline of April 15th may seem tempting, but if you put everything off until the last moment and make a mistake, this delay can be expensive in the future, writes USA Today.
Due to one of the most common mistakes, you may lose a large refund, owe more in taxes, and even run into an IRS check.
“Taxes are complex and everyone makes mistakes,” says Dina Piron, TaxChat financial services partner at Ernst & Young. “The basic points can easily be overlooked, and this, unfortunately, leads to delays in processing your income.”
If you expect a tax refund, but your basic personal information is not true, the IRS may take at least 4 to 6 weeks to notify you by mail that you need to respond and correct your mistake. Byron warns that processing your tax data may take several months or even a year, depending on the severity of the error.
“Typical errors can lead to significant delays in the return of any type of tax payment you may receive,” says Byron.
Here are seven common mistakes taxpayers should avoid:
1. New name or wrong address
Have you changed your name or moved to a new address? If you have legally changed your name on the Social Security Administration, make sure it is reflected on your federal and state tax returns. Non-compliance may delay the processing of your tax documents. Any correspondence and even your tax refund by mail may be sent to the wrong address if it is indicated incorrectly.
2. Invalid bank account numbers
Be sure to double-check the account numbers in your tax return. Taxpayers who are expecting tax refunds should choose direct deposit - As a rule, this is the fastest way to get money.
On the subject: From fine to jail time: what happens if you don't pay taxes
3. Information is not about all income
Some people often do not realize that they have received tax-free income. If you do not provide any income, this can lead to unpaid taxes, as well as interest and fines. This may not be obvious when you receive a new tax form - for example, 1099 or K-1, which includes income that must be indicated on an individual tax return. It is very important to report on your activities using these forms. The IRS usually receives a copy and can determine if there are any discrepancies in the records.
4. The status at the time of filing is incorrectly indicated
If you have been legally married for a year or less, do not forget that your status at the time of filing may change - if you previously filed a tax return yourself, now you can do it together or separately, already being married. There are other filing statuses that you may not have considered, and they may provide certain tax benefits.
5. Loans or deductions
You can make mistakes when you need to determine which loans or deductions you can claim with your income. For example, a taxpayer who is 65 years old or older should claim the correct, higher standard deduction if he does not use drillthroughs, say the IRS. Online tax assistant on IRS.gov help determine if you qualify for tax credits or deductions.
6. Mathematical errors
Math mistakes are some of the most common mistakes people make when filling out tax documents. They range from simple addition and subtraction to more complex calculations. Taxpayers should always double-check their calculations. In this case, tax preparation software may come in handy: there, mathematical calculations are performed automatically.
On the subject: 4 legal tax loopholes to save thousands of dollars in 2020
7. Unsigned forms
An unsigned tax return is not valid. In most cases, both spouses must sign joint tax documents. Exceptions may apply to military personnel or other taxpayers with a valid power of attorney. You can avoid this error by submitting your declaration electronically and signing it digitally before sending it to the IRS.
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