The IRS Says to Avoid These Top 10 Typical Tax Return Errors

The IRS tells us that most of the problems that taxpayers run into are not intentional, nor are they that serious. However, these common errors can delay refunds or otherwise impact normal processing. Though they did not number them, these are the ten most typical errors straight from the IRS websitei.

Not using electronic filing – Using the IRS Free Fileii service or another e-file service provider results in fewer errors on returns. Mistakes are minimized, and often deductions are maximized when using e-file. The reason is that the software automatically checks for the newest tax laws, available credits, or deductions, and does the calculations for you. It prompts the taxpayer for all necessary information as well.

Report all income – Be sure that you have all Forms W-2, 1099-MISC, or 1099-NEC as applicable. If you did work for a business more than $600 during the tax year and you have not received a tax form from them, check to see why. You want to report all taxable income.

Check the accuracy of all names, Social Security and Tax numbers – You should check names and numbers on issued documents to be certain that you have not made errors. If there are errors in names or tax numbers, it will trigger an error at the IRS and could result in an inquiry for correction.

Use the correct filing status – If you are unsure about your correct filing status, the IRS provides an online Interactive Tax Assistant application that asks questions that allow it to provide the correct filing status. A common question is whether to file as married filing jointly or married filing separately. The assistant will help you to file with the proper status.

Accurately answer the virtual currency question – The new Form 1040 asks if at any time during the tax year a person received, sold, sent, exchanged, or otherwise acquired any financial interest in any virtual currency. If you only purchased virtual currency during the tax year, you do not have to answer “yes” to the question.

Mail returns to the correct IRS address – Depending on where you live, there is a specific IRS address for your mailed return. Check and use the correct address, as delays in processing will occur if you send your return to the wrong address.

Be accurate with routing and account numbers for refunds – A popular benefit is the ability to have a tax refund deposited into one or more accounts. This makes the money accessible sooner to the taxpayer. Be certain to double-check the routing and account numbers of your account(s), as an error will unnecessarily delay your refund or worse, have it deposited to the wrong account.

Sign and date the return – It sounds so obvious and simple, but the IRS says that leaving off a date or signature is a common error.

Keep a copy of your return – Perhaps a better way to say this is to keep a copy where you can access it easily if there is a question about any of the information. Surprisingly, many people stash it away and then cannot find it later. If you use a CPA or tax preparer, they will have a copy, but you may have to pay a charge to get one.

If you need it, request an extension – It is better to request an extension than to miss a filing deadline which can result in a late filing penalty. Also remember that the extension is for the filing, but you still must pay taxes due on the due date.

There you have the top 10 typical mistakes on tax returns as laid out on the IRS website.

i Steer clear of typical tax return errors – IRS.gov

ii IRS Free File – IRS.gov

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