These Common Tax Mistakes Can Cost You Big, According to the IRS
Taxes can get complicated, but most of the common mistakes that filers make on their tax return are simple. However, one small error could hold up your tax return or refund for weeks or months — or even cost you money. According to the IRS, most mistakes can be avoided by filing electronically or getting help from certified public accountants, enrolled agents or other knowledgeable tax professionals.
Here are some of the most common tax mistakes that people make.
Filing Too Early
While it’s a good idea to file early, filing too early could mean missing important documents. Without all the necessary information and paperwork in hand when preparing to file, you could have an inaccurate (or incomplete) tax return.
Missing or Inaccurate Social Security Numbers
The IRS uses Social Security numbers to make sure you are who you say you are — and to cross-check information it receives from you with what it receives from your employer or bank. If a Social Security number is off by one digit, the IRS could reject your return.
The name on your tax return should match the name on your Social Security card. If you misspell your name or don’t use your legal name, it could raise a red flag. If you’ve changed your name, make sure you notify the Social Security Administration or call the IRS to correct any information over the phone.
Entering Information Inaccurately
Report all wages, dividends, bank interest and other income that you received on your information return accurately. The IRS already has this information and will quickly pick up on any inaccuracies. If you see an error, contact the business that made the payment to request a correction.
Incorrect Filing Status
To avoid using the incorrect filing status, the IRS suggests using the Interactive Tax Assistant on IRS.gov, especially if more than one filing status applies. This mistake can also be avoided by using tax software.
Math errors are the most common mistake, according to the IRS. This mistake also happens more frequently to those filing a paper return. You can avoid this by using tax software or hiring a reputable tax preparer.
Figuring Credits or Deductions
It’s easy to make mistakes when trying to figure out if you are eligible for certain credits and deductions. Tax software and preparers will do the work for you by finding deductions, credits and exemptions that you may qualify for and making the calculations.
Incorrect Bank Account Numbers
If you’re due a refund, the fastest way to receive what’s owed to you is by direct deposit. Make sure you use the correct routing and account numbers. The wrong information could mean a delay.
An unsigned form means it’s invalid. Make sure you and your spouse both sign if filing a joint return. Exceptions include members of the armed forces or those who have a valid power of attorney.
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