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It’s tempting to put off filing your taxes until just before the April 15 deadline, but making a sloppy mistake may wind up costing you down the road.
You could miss out on a larger refund, owe more in taxes or even face an audit from the IRS.
“Taxes are complex and everybody makes mistakes,” says Dina Pyron, financial services partner and global TaxChat leader at Ernst & Young. “The basics can be easily overlooked, and that, unfortunately, results in delays in processing your return.”
Some of the most common errors that filers make during tax season include having the wrong address, incorrect bank account numbers and not reporting your updated income, experts say.
What tax deductions and credits can I claim?:Here are 9 overlooked ones
What will my tax refund be?:So far, they’re smaller by an average of $18
If you’re expecting a refund but your basic personal information doesn’t match, it could take a minimum of four to six weeks for the IRS to notify you via mail that you need to respond and correct your mistake. Then it could still take a few months or even up to a year to process your return depending on the severity of your mistake, Pyron cautions.
“These types of common errors can have significant delays in getting back any type of payment that you might be receiving on your taxes,” Pyron says.
Here are seven common errors that taxpayers should avoid:
1. Name change or wrong address
Did you change your name or move to a new address? If you legally changed your name with the Social Security Administration, make sure it is reflected in your federal and state tax returns. A mismatch may delay the processing of your returns. Any correspondence and even your tax refund may get mailed to the wrong address.
2. Incorrect bank account numbers
Be sure to double-check the routing and account numbers on your return. Taxpayers who are anticipating a refund should choose direct deposit, which is typically the fastest way to get your money.
3. Failing to report all of your income
Individuals oftentimes don’t realize they generated income that is subject to tax. Omitting income from a tax return can result in unpaid taxes subject to interest and various penalties. A person may be unfamiliar when they receive a new tax form, such as a 1099 or K-1, that includes income to be reported on an individual income tax return. It’s crucial to report your activities from these forms. The IRS generally receives a copy and can determine if any discrepancies exist from their records.
4. Incorrect filing status
If you were legally married during the year, don’t forget your filing status may change from Single to Married Filing Jointly or Married Filing Separately. There are other filing statuses that you may not have considered, such as Head of Household or Qualifying Widower, that may yield certain tax benefits.
5. Credits or deductions
You can make mistakes when it comes to figuring out things like which credits or deductions to claim on your returns. For instance, a taxpayer who’s 65 or older, or blind, should claim the correct, higher standard deduction if they’re not itemizing, the IRS says. The Interactive Tax Assistant on IRS.gov can help determine if your eligible for tax credits or deductions.
6. Math mistakes
Math errors are among the most common mistakes that filers make. They range from simple addition and subtraction to more complex calculations. Taxpayers should always double-check their math. This is when tax prep software can come in handy since it does the math automatically.
7. Unsigned forms
An unsigned tax return isn’t valid. In most cases, both spouses must sign a joint return. Exceptions may apply for members of the armed forces or other taxpayers who have a valid power of attorney. You can avoid this error by filing your return electronically and digitally signing it before sending it to the IRS.
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