Tips for avoiding costly errors on your tax return
(BPT) - Making mistakes is one of Americans’ biggest fears at tax time. A single error can delay the processing of your return or even cause it to be rejected by the IRS. If that happens and you’re entitled to a refund, get ready to wait.
Today’s sophisticated tax preparation products make doing your own taxes perfect the first time at an affordable price – or even free – a reality for millions of Americans each year.
“Online and downloadable solutions have everything the vast majority of taxpayers need to file their taxes with complete confidence,” says Jessi Dolmage, TaxACT Spokesperson. "Using do-it-yourself tax preparation software solutions drastically reduces the chance of errors, especially if you import last year's return information.”
If you’re doing your own taxes for the first time this year or aren’t able to import last year’s return, be especially careful to avoid these common errors.
*Every year, the IRS receives millions of returns with misspelled names and incorrect Social Security Numbers (SSN), particularly those of dependents. When processing your return, the IRS verifies names and SSNs on your return with the Social Security Administration's database. If the information doesn’t match, the IRS will notify you. Although the errors are easy to correct, they could delay refundable credits for parents and college students, and refunds for the Earned Income Tax Credit.
*Report all your income. The IRS can easily check how much income you received based on your SSN and 1099 forms financial institutions are required to submit. If unreported income is discovered after the filing deadline, you could owe penalties and interest on the earnings.
*Because filing status determines many amounts on tax returns, the IRS has strict qualifying criteria for each of the five filing statuses. If you don’t meet all the requirements for the filing status claimed on your return, the IRS could reject your return. If you qualify for more than one status, claim the one resulting in the bigger refund or less tax owed. See IRS Publication 501, Exemptions, Standard Deduction and Filing Information, for detailed information about filing statuses. Tax preparation programs simplify it all by guiding you through your options and helping you choose.
*Whether you’re receiving a refund or owe taxes, double check the routing and account numbers on your return. One incorrect number can mean several extra weeks of waiting for your refund, someone else receiving your refund, or your refund being sent back to the IRS.
*With hundreds of deductions and credits available for the taking, it’s easy to miss one. The onus is on you as the taxpayer, not the IRS, to claim all the tax breaks you qualify for. Dolmage says that’s one of the key advantages of using tax preparation solutions. "The program walks you through each credit and deduction to help you get the biggest possible refund," says Dolmage. "All you have to do is answer simple questions."
*Finally, file your tax return and pay any taxes owed by the April 15 deadline. If you need more time to file your return, file Form 4868 for an automatic six-month filing extension. However, keep in mind you’re still obligated to pay any taxes owed by April 15. Pay late and you’ll incur penalties and interest fees.
Dolmage also says, "Another all-too-common mistake is paying too much to do your taxes. Expensive solutions don't equate to a larger refund. All taxpayers can prepare, print and e-file federal tax returns free at www.taxact.com – no restrictions, no bait and switch."
TaxACT Free Federal Edition includes all e-fileable forms for simple and complicated tax returns. Regardless of how you filed last year, you can transfer data from last year's return. Instant, personalized help is available every step of the way in the Answer Center, online at taxact.com and with Audit Assistant. Customers can also email tax and audit questions to TaxPayer Support Specialists for free answers.