Making a mistake on your tax return can delay any refund that might be coming to you. For some people, this could mean the difference between making an on-time payment or being late, which can result in penalties.
Every year, however, countless people make errors on their tax returns. Before you hit submit, make sure you do a quick double-check of these common mistakes tax filers make on their returns.
Double-checking for these before you file your return can save you time, money and headaches.
You might be thinking, who misspells their own name? But it happens.
The Social Security Administration (SSA) is what the IRS will verify any name against. In other words, the SSA is the point of record. Anytime your name changes, the SSA should be the first agency you contact to have your name updated. Otherwise, you’ll find that there is a cascading effect that can range from the DMV to new credit requests, applying for TSA PreCheck and updating your passport. In other words, it isn’t fun if you miss this step.
Often, misspelled names are more of a problem for women than men. This is due to changing their name after getting married or even after getting a divorce. If you have one of those major life events take place, be sure to update your information with the SSA.
It’s important to note that it can be the same for same-sex marriages where a name change takes place.
Wrong Filing Status
This is one error that can cost you money directly from your return. Choosing the wrong filing status will most likely change your return in some way.
It might simply be a mistake that the wrong filing status was chosen, but once again, life events can muddy the picture. If you were just divorced and your children are living with you, head of household will probably be more beneficial than filing as single.
Parents who are not divorced but living separately might elect not to file as married. In all cases, it’s best to speak with your accountant if you have any concerns about your filing status.
1099-MISC forms are received for any extra earnings you had during the year. This can be from doing contract work or small jobs. It also must be reported on your tax return.
A 1099-INT or 1099-DIV includes earnings from savings and investments. Depending on your investments, things can get complicated. Some brokerages might not report your earnings to the IRS, but you should definitely include them with your return.
“Check your return to see if it matches the 1099 in your broker files, including cost-basis information — whether that was reported to the IRS or not,” said Robert Aruldoss, senior financial planning research analyst at the Schwab Center for Financial Research.
1099s will arrive at the beginning of the year, but depending on how many you have, they might come at different times. Also, keep in mind that sometimes a 1099 will be reissued. This means waiting a little while in case another one with corrections arrives after the original was sent out.
It’s best to be patient and try not to file right after you’ve received just a few 1099s. Give any others time to trickle in. Filing an amended return simply because you didn’t wait for all your tax forms is not ideal. Beyond the change in your tax return, you’ll have to pay to file that amended return as well, unless you do it yourself.
Incorrect or Missing Social Security Number
It’s easy to type in the wrong Social Security number. There’s a lot to fill out on a tax return and much of it is numbers. Double-checking that your Social Security number is correct can keep you from a delayed refund.
Just as important is remembering not to completely leave out your Social Security number.
According to the IRS, in 2017, 92 percent of people filed their taxes electronically.
When e-filing, signatures are done electronically. Take time to recognize all areas where an electronic signature is required. Just like paper filing that has little tabs sticking out to show you where to sign, most tax software should also have some way of highlighting where to sign electronically.
But if not, you’ll need to verify your e-signature is on all pages that it should be.
Save Big With Double-Checking
The last thing you want to have to deal with when filing your taxes is fixing a mistake after you’ve filed. You can plan a little bit up front by ensuring that you stay organized with all your tax documents.
And before you hit submit and file your tax return, make sure you’re double-checking for the above common mistakes, so you can save yourself a lot of time in getting your refund processed.
Click here to read more about the signs a professional needs to file your taxes.