It’s the little things that can get taxpayers. Simple math errors, poor penmanship or hurriedly filling out your tax form at the last minute account for loads of filing errors. And those slip ups, which typically happen with paper returns, give the Internal Revenue Service another opportunity to tout the benefits of filing taxes electronically.
“We strongly suggest that people file electronically,” said IRS spokesman Mark Green. “It’s fast, safe, accurate and free.”
In the last 28 years on the job, Green has seen all the mistakes taxpayers are most likely to make, and then some.
“Taxpayers want to avoid the common errors, like leaving off the social security number for dependents, or accidentally switching a son’s number with a daughter’s. It happens more than you can imagine,” he said. Also, leaving off the ID number for your child care provider is just one omission that can sidetrack your refund.
Bay St. Louis CPA Charles Benvenutti offers this simple advice: “Complete the return and let it sit for a couple of days. Review it again before sending. You’ll have a much better chance of catching your mistakes.”
Green also suggests taxpayers double-check all of their numbers closely. “Not looking at the figures correctly can be costly,” he warned. “It could reduce your refund or cause an increase in the tax you owe.”
The most common mistake Green has seen in his IRS career? “You’re rushing to get everything completed, you’ve double checked the numbers and everything on the tax return but you forget to sign the return,” he said. “It’s the biggest mistake I see every year.”
Here are the top eight errors commonly made that taxpayers should avoid, according to the IRS:
» Wrong or missing Social Security numbers. SSNs for the taxpayer and others on a tax return must be provided exactly as they are on the Social Security cards.
» Names wrong or misspelled. All names on a tax return must be exactly as they appear on their Social Security cards.
» Filing status errors. The IRS says to choose the right filing status from these five: Single, Married Filing Jointly, Married Filing Separately, Head of Household and Qualifying Widow(er) With Dependent Child. Not sure which one you are? See Publication 501, Exemptions, Standard Deduction and Filing Information. E-filing your tax return will also help you choose the right filing status.
» Math mistakes. Double check the math on paper returns. If you e-file, the software does the math for you, says the IRS.
» Errors in figuring credits, deductions. The IRS advises taxpayers to carefully read the instructions in your tax booklet carefully.
» Mistakes are often made in figuring the Earned Income Tax Credit, Child and Dependent Care Credit and the standard deduction.
» Wrong bank account numbers. Want your refund fast? The IRS says direct deposit is the fast, easy and safe way to receive your tax refund. Just make sure your bank routing and account numbers are entered correctly.
» Forms not signed, dated. The IRS says an unsigned tax return is invalid. Married? “Guess what,” says the IRS’ Green. “We need both signatures on a joint return.”
» Electronic signature errors. If you e-file your tax return, you will sign the return electronically using a Personal Identification Number. For security purposes, the IRS says, the software will ask you to enter the Adjusted Gross Income from your originally-filed 2011 return. You may also use last year’s PIN.
Green said another common mistake is made by self-employed people who wait to pay taxes at the end of the year rather than quarterly.
“If you are required to make estimated tax payments, make them throughout the year to avoid a penalty at the end of the year for not making the payments,” he said. Estimated tax payments are due quarterly starting April 15.
If you waited until the last minute this tax season to file your return, you might want to get an earlier start next year, Green said. And if you’ve been favoring a paper return, you might also want to join the estimated 1.1 million Mississippians who filed their taxes electronically this year. That’s about 85 percent of the state’s 1.3 million tax filers, Green said.
E filing cuts down on many common errors that paper filers fall victim to, the IRS says.
Green said now is the time to make some adjustments to your W-4 if you get a big refund every year or if you owe taxes every year.
“If you owe money every year, we encourage you to make an adjustment to your W-4,” Green said. “Likewise, if you get a large refund, you may want to decrease your withholding and have that money come to you in each paycheck instead.”
The IRS web site, www.irs.gov, has a withholding calculator that can help employees figure out whether they need a new Form W-4 so they’re not holding out too much or too little Federal income tax from their paycheck.
The web site, Green said, also highlights tax law changes that taxpayers should be familiar with each year.
And if you didn’t file a return or extension by the April 15 deadline, Green says, “It’s never too late. Start now to cut down on penalties and interest that started accruing on April 16.”