One of the most important ways taxpayers can reduce the number of errors they have on their tax returns is by electronically filing them. Most tax software programs do the math for individuals, flag common errors, and prompts taxpayers for missing information. Using tax software can also help a taxpayer claim valuable credits and deductions.
Another way to avoid making common errors is by using a reputable tax preparer. This includes certified public accountants, enrolled agents, or other knowledgeable tax professionals.
The IRS urges all taxpayers to file their tax returns electronically and choose direct deposits in order to receive their refund faster and avoid pandemic-related paper delays.
Optima Tax Relief reviews some common errors taxpayers should avoid when preparing their tax return:
- Double-check your Social Security (SSN) number. Although it seems obvious to include your SSN on your taxes, it is a common error to forget to add a number or accidentally put the incorrect number on your return.
- Misspelled names. Taxpayers should list their name on their tax return the same way it is listed on their Social Security card.
- Math mistakes. Math errors are one of the most common mistakes on a tax return and can range from simple addition and subtraction to much more complex calculations. Taxpayers should always check their math or use a tax prep software program that will do it automatically for them.
- Figuring credits or deductions. Taxpayers can make mistakes figuring things like their earned income tax credit, child and dependent care credit, and recovery rebate credit. If someone is eligible for a recovery rebate credit – and either did not receive Economic Impact Payments or received less than the full amounts – they must file a 2020 tax return to claim the credit even if they do not usually file.
- Inaccurate bank account numbers. Taxpayers who choose to receive their refund through direct deposit should make sure that their routing and account numbers are correct before sending their tax return off to the IRS.
- Unsigned forms. An unsigned tax return is not valid. In most cases, both spouses must sign a joint return.
- Filing with an expired individual tax identification number. If a taxpayer’s ITIN is expired, they should go ahead and file using the expired number. The IRS will process that return and treat it as a return filed on time. However, the IRS will not allow any exemptions or credits to a return filed with an expired ITIN.