Common Tax Mistakes: Avoid These Errors to Get a Quick IRS Tax Refund

Common Tax Mistakes: Avoid These Errors to Get a Quick IRS Tax Refund

gettyimages-1253877203

It’s worth double-checking your tax return for even the most obvious errors. 


Getty Images

This story is part of Taxes 2022, CNET’s coverage of the best tax software and everything else you need to get your return filed quickly, accurately and on-time.

Taxes are stressful. The best tax software can help complete and file your tax return, but if you don’t want to shell out big bucks for a professional tax preparer, you’re still on the hook for interpreting your tax documents and ensuring all of your information is accurate and up to date.

To receive your correct tax refund on time and get all the money you deserve, be sure to double-check our list of common tax return errors below. If you do receive a tax return rejection notice and you filed your taxes on time, don’t panic — you have five days to correct the information and refile, although any tax refund will be delayed.

For more, learn about CNET’s picks of the best free tax software, how to track your tax refund electronically or in the mail and the biggest tax changes and deductions for 2022.

Mistake No. 1: Filing your tax return late

Tax deadline day this year in the US is April 18. The IRS estimates that about 20% of taxpayers wait until the week before the deadline to file their tax returns. If you owe the IRS money, that’s not necessarily a bad tactic, but if you have a refund coming, that’s playing with fire.

Procrastinating on your taxes leaves little wiggle room if problems arise, and not filing your return on time will definitely complicate the status of your tax refund. If you owe the IRS money, you’ll need to pay a late filing fee and other penalties will start to accrue.

It’s free to file a six-month extension until Oct. 18, but you’ll have to pay estimated taxes owed and you’re losing money if you’re expecting a refund.

Mistake No. 2: Misspelling names or entering a wrong Social Security number

This mistake might seem ridiculous, but it’s more common than you might think. Be sure to enter your full name exactly as it is spelled on your Social Security card, as well as the exact Social Security number. If either are not exactly the same, your tax return will be rejected. 

If your legal name has changed, you’ll need to contact the Social Security Administration first to update it, and then file your taxes with your proper name.

Mistake No. 3: Using the wrong filing status

US taxpayers can file their tax returns as Single, Married FIling Jointly, Married Filing Separately, Head of Household and Qualifying Widow(er) with Dependent Child. Your filing status determines your standard deduction, eligibility for tax credits and your overall tax burden. 

The IRS’ What Is My Filing Status? tool will help you determine your own situation and make the proper selection. If your filing status is incorrect, at best you’ll need to file an amended return with Form 1040-X. At worst, the IRS may suspect tax fraud and investigate.

Mistake No. 4: Calculation errors with credits or deductions

piggy bank and calculator

Don’t let arithmetic mistakes bring you down.


Sarah Tew/CNET

Child tax credit, earned income tax credit, mortgage interest deduction, child care deduction — the worksheets and rules for many such tax items can be tricky to calculate on your own. A mistyped number or wrong calculation can result in an inaccurate tax refund, meaning you’re either losing possible money or will have to pay an overage back with fees and penalties.

Quality tax software will nearly eliminate these sorts of errors, collecting and calculating all of the numbers you need to file your taxes correctly. All the top tax products offer accuracy guarantees that will pay for any losses or penalties if their software makes calculation errors. You’ll still need to enter correct information in order for tax software to work successfully, so be sure to double-check all your numbers before filing.

If you prefer to do your taxes yourself the old-fashioned way, the IRS’ Interactive Tax Assistant can help with a wide range of credit and deduction calculations.

Mistake No. 5: Incorrect child tax credit and stimulus payment info

If you received monthly advance child tax credit payments or the third stimulus check last year, you’ll need to report the total amounts of those payments on your 2021 tax return. If you fail to include that info or get the amounts wrong, the IRS says that it “will need to further review the tax return, creating an extensive delay.”

Earlier in the year, the IRS sent letters to taxpayers — Letter 6475 for your stimulus check (or economic impact payment) and Letter 6419 for your child tax credit payments — that included the total amounts. If you didn’t receive those letters or accidentally discarded them, you can also look up that information with an online IRS account.

In testimony to the House Ways and Means Committee, IRS Commissioner Charles P. Rettig reported that the IRS “received far more than 10 million returns” last year where taxpayers made mistakes reporting stimulus payments. Those returns require manual reviews that can create lengthy delays.

Mistake No. 6: Entering wrong bank account or routing numbers

File electronically with direct deposit and you’ll get your refund in about 21 days, according to the IRS. However, it won’t work if you enter the wrong bank account or routing numbers when you file your tax return. Once the IRS has accepted your return, it’s too late to change your banking info.

If the IRS cannot deposit your refund electronically into your bank account, it will send you a paper check at the mailing address listed on your tax return, which the IRS says will take six to eight weeks, though you can set up alerts with the Postal Service to know when it will arrive.

If you accidentally enter valid account and routing numbers that aren’t yours on your tax return, the IRS may deposit your tax refund money into someone else’s bank account. In that case, you’ll need to contact the bank and likely visit an office in person to prove your identity and explain the situation with documentation. After you get the bank to return the money, you’ll receive a paper check in the mail from the IRS.

Mistake No. 7: Unsigned tax returns

Filing a paper tax return will slow down your tax refund considerably. Filing it without a signature will cause the IRS to reject your return and ask you to file again, making the process considerably slower.

If you’re married filing jointly, both partners need to sign the tax return. There are exceptions for active military members overseas and others needing to use a third party with power of attorney.

File electronically, sign your return digitally and you’ll never have to worry about this mistake ever.



Source link

Leave a Reply