Filing returns can be confusing. You see, the United States tax code is over 4 million words. That’s a lot of tax jargon to comprehend.
However, as much as the rules are complicated, most of the mistakes people make when filing returns are fairly simple. This is mostly because most people are tempted to dash and try to finish this burdensome task of filing taxes as soon as possible. Some mistakes can cost you a bundle, or worse, increase the probability of an IRS audit. Don’t rush. Take time to try and avoid the following simple mistakes.
1. Missing or inaccurate social security numbers
IRS receives several tax returns with either inaccurate Social Security numbers or no Social Security number at all. You can easily transpose numbers when typing faster than you think. Attempting to recall Social Security numbers, especially for your kids or spouse, can lead to mistakes. Whether you are e-filing or filing on paper, ensure you double-check.
2. Misspelled names
It would be insane to get your own name wrong, wouldn’t it? But you would be surprised to know the number of people who misspell their spouse and dependents names. It is, however, always not on purpose – the name on the tax return should be as they appear on the individual’s Social Security number. Sometimes the Social Security Administration (SSA) will get the name wrong (say a name is appearing backward on a card) or just a simple spelling mistake on the card. In case there are changes in the name(s), make sure you contact the Social Security Administration for a new card.
3. Multiple/incorrect filing errors
It is common for people to choose the wrong filing status. Although it is impossible to file under multiple statuses when filing online, it is common for people filing on paper to check off multiple statuses at a go. Interactive Tax Assistant will help you choose the correct filing status.
4. Math mistakes
Math errors are probably the most common tax mistakes. They range from simple addition and subtractions to more complicated items. Figuring out IRA distribution, the taxable portion of a pension, or Social Security benefits is difficult and can result in more errors. Ensure you double-check your math or better yet hire a tax professional, so you don’t have to do the math yourself. Use this tax return calculator to estimate your returns.
5. Incorrect bank account numbers
If you qualify for a tax refund and you use direct deposit, you can receive your tax refund within 21 days. Unfortunately, this is not possible when you give the wrong account or bank routing number.
6. Failing to sign forms
Sometimes in a rush to get the return to the mail, you forget to sign it. It is a common mistake. Unfortunately, an unsigned form is like an unsigned check – it is invalid. Remember, both spouses must sign if you are filing jointly. To avoid this mistake, you can file electronically and sign digitally before sending it to the IRS.