Monday, April 7, 2014

Eight Tax-Time Errors to Avoid



Eight Tax-Time Errors to Avoid

Tax Day is just over a week away.  As you enter the home stretch, here are some errors to look out for.  If you make a mistake on your tax return, it usually takes the IRS longer to process it. The IRS may have to contact you about that mistake before your return is processed, which will delay the receipt of your tax refund.

The IRS says that e-filing greatly lowers the chance of errors. In fact, you’re about twenty times more likely to make a mistake on your return if you file a paper return instead of e-filing!
Here are eight common errors to avoid.

1. Wrong or missing Social Security numbers.  Be sure you enter SS#s for yourself and others on your tax return exactly as they are on the Social Security cards.

2. Names wrong or misspelled.  Be sure you enter names of all individuals on your tax return exactly as they are on their Social Security cards.

3. Filing status errors.  There are five filing statuses: Single, Married Filing Jointly, Married Filing Separately, Head of Household and Qualifying Widow(er) With Dependent Child. Most people know their status, but if you’re unsure, IRS Publication 501, Exemptions, Standard Deduction and Filing Information, can help you choose the right one. Electronic tax prep programs will also help you choose the correct filing status.

4. Math mistakes.  If you file a paper tax return, double and triple check your math. If you e-file, the software does the math for you, but check it yourself, anyway. 

5. Errors in figuring credits, deductions.  Take your time and read the instructions carefully. Many people make mistakes figuring their Earned Income Tax Credit, Child and Dependent Care Credit and their standard or itemized deductions. 

6. Wrong bank account numbers.  Direct deposit is the best way to receive your tax refund. It’s fast, easy, and safe.  But make sure you enter your bank routing and account numbers correctly.

7. Paper forms not signed, dated.  An unsigned tax return is like an unsigned check – it’s invalid. Remember both spouses must sign a joint return.

8. 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 software will ask you to enter the Adjusted Gross Income from your originally-filed 2012 federal tax return. (Don’t use the AGI amount from an amended or corrected 2012 return.) You may also use last year's PIN if you e-filed last year and remember your PIN.

Get tax advice from The Actor’s Tax Guide at www.ActorsTaxGuide.com.

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