12 Common Tax Filing Mistakes to Avoid in 2011
Knock Knock...Uncle Sam Calling
Let's face it: For many taxpayers, Tax Day is a major source of stress. Worries over whether you can file your return on time, pay what you owe and avoid an audit can rattle even the calmest of nerves and cause you to make a mistake. Mistakes on your tax return can cause a delay in processing your return, which may result in a delay in getting your refund.
Taking a moment or two to catch your breath and review your tax return for mistakes can give you peace of mind. Here are 12 common tax filing mistakes to watch for (and avoid):
- Math errors. Believe it or not, even with the surge in e-filing, the IRS continues to cite math errors as a top filing mistake. Check your math carefully if you do the calculations yourself; if you're relying on tax preparation software, make sure you input the correct numbers.
- Incorrect Social Security numbers. Transposing numbers is an easy mistake to make. Take a moment or two to double check that you've entered your numbers correctly.
- Missing Social Security or Taxpayer Identification numbers. Just as easy as punching in the wrong numbers is forgetting to input numbers altogether. Failing to include taxpayer identification numbers can cause you to lose valuable credits and deductions; key numbers to watch for include your Social Security number for dependents and child-care providers.
- Opting for the wrong filing status. With so many choices, it can be easy to choose the wrong filing status. Make sure you understand what each of the filing status options are, and choose the right one for you.
- Mismatched names. Remember that the IRS matches names and Social Security numbers together. If you enter a name on your tax return that doesn't exactly match the Social Security records, it may appear as an error to the IRS. If you've gotten married, divorced or otherwise changed your name (or if one of your dependents has changed his or her name), take the necessary steps to change the records with the Social Security Administration.
- Computation errors. It's not just bad math that you have to worry about. Sometimes, taxpayers make mistakes when figuring taxable income versus adjusted gross income. Make sure you understand which number to put where when calculating whether your Social Security or other income is taxable, or when figuring out your deductions and credits.
- Forgetting to include estimated payments or previously applied refund payments. When you're gathering your tax information for 2010, don't forget to check your 2009 return to see whether you might have applied any refund due for that year against your 2010 tax bill. Additionally, be sure to comb through old bank statements for estimated or other tax payments made during the year; you don't want to forget to apply them toward your overall liability for 2010.
- Omitting forms W-2 or other tax documents. Tax documents can be overwhelming and they can trickle in over time (they can even be late). It's important to stay organized so you don't leave any key information out. The IRS will match forms to your return, so include everything.
- Incorrect bank account numbers for Direct Deposit. Filing electronically means you can get your refund fast -- and if you use direct deposit as well, you can get your refund even faster. Just make sure you use the correct routing and account numbers so your refund ends up in the right place.
- Forgetting to sign and date the return. Make sure you sign your tax return. Also keep in mind that a joint tax return should have two signatures. Forgetting to sign your return can cause it to be returned.
- Sending your return to the wrong address. The IRS has made several changes to its service centers this year so don't use a pre-addressed envelope from a prior year's return. Check the instructions for your return and send yours to the right place.
- Not using the correct postage. Postage is going up this year ... the day before tax returns are due. The cost of a stamp for a basic letter remains the same, but the price to send larger envelopes will increase on April 17. Tax Day this year is April 18.
Taking a few moments to check over your return and catch any mistakes is time well spent. Of course, if you find out that you've made a mistake after you've filed, it's not too late. You can always take steps to fix your mistake -- but wouldn't it be easier not to make them in the first place?