Making a mistake on your tax return could lead to a smaller refund, a larger tax bill or a delayed refund. Every tax season, the IRS receives tax returns plagued by the same common mistakes. The good thing is these mistakes are easy to avoid once you know what to look out for.
Tax Mistake #1: Math Errors
According to Bankrate, math errors are one of the most common mistakes on tax returns, especially when people complete their returns on paper forms. These errors can range from simple arithmetic mistakes to figuring out the wrong numbers for taxable income or estimated tax payment. The best way to avoid making math errors on your tax returns is to use an e-filing software that does the math for you. Make sure that you are entering the correct numbers into the software, however, as this could lead to filing the wrong information.
Tax Mistake #2: Misspelled or Wrong Names
Believe it or not, misspelling a name or using the wrong name on forms, is one of the common mistakes that people commit when submitting their taxes. Usually, this mistake occurs because the name is not the same as the one on file with the Social Security Administration. Also, women who get married or divorced sometimes forget to update their Social Security card with their new last name. The simplest way to avoid this mistake is to check the spelling on your card before entering your name on tax forms. Also, if you recently changed your name, make sure your Social Security card reflects this change.
Tax Mistake #3: Direct Deposit Errors
People sometimes enter the wrong information for their bank account when they opt to get their refund deposited directly into their account. This can cause you to lose part or all of your refund, as the IRS will not track down money that went into the wrong account. To avoid this costly mistake, double check the account information you are entering.
Tax Mistake #4: Choosing the Wrong Filing Status
Filing status is important for how your tax return is computed, so choosing the wrong status can cause errors in your refund amount. To prevent this mistake use e-filing software or the tool on the IRS’ website to help you decide your filing status.
Tax Mistake #5: Forgetting to Sign the Return
The IRS cannot process a return without a signature, and if you are filing jointly with your spouse, both of you must sign. The easiest way to avoid this mistake is to file electronically where you will be prompted to e-sign the return using a PIN number.