10 Common Tax Errors People Make

10 Common Tax Errors People Make
Awareness is key
As tax season draws to a close, there are millions of procrastinators scurrying to try to make sure they get everything right in putting the finishing touches on their tax returns for the 2017 tax year. Yet all too often, the problems that the Internal Revenue Service sees most frequently are simple and silly mistakes that are easily avoided. Click through to discover 10 of the most common tax mistakes that people make. As you'll see, it's simple not to make these errors as long as you know what they are and remember to look out for them.
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1. Bad Social Security numbers
All of the tax documents that your employer, financial institutions, and others report on your behalf use your Social Security number. If you get it wrong on your return, then you've almost guaranteed yourself that red flags will appear, as the IRS computers won't be able to match up the numbers on your return with what shows up in their database. Social Security numbers are also important in claiming dependents and in tax breaks for members of your family that are tied to their particular identity, so it pays to double-check to make sure you have everything correctly listed on the return.
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2. Incorrect or out-of-date name information
You'd think that a name would be the simplest part of completing your tax return, but there are many mistakes that are possible. In addition to simple misspellings, one thing that commonly happens is that people forget to take the correct steps to handle name changes following marriage or divorce. The key is to match up your name on your tax return with what the Social Security Administration has on file for your Social Security information. That way, all the government's databases will have the same correct information.
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3. Mailing addresses that don't match IRS information
It's important to keep your mailing address up to date in order to make sure the IRS has the correct information on file. The most obvious reason why a correct mailing address is important is if you expect to receive a paper refund check, because having that check sent to the wrong address can create long delays in getting your money back. Even if you aren't having a refund sent to your mailing address, having information that's different from what employers and other reporting entities have on their information returns can be problematic.
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4. Math errors
One reason why the IRS encourages electronic filing so much is that paper returns often have egregious math errors that involve addition or subtraction mistakes. In some cases, the IRS can simply correct your math and either send you the appropriate refund or bill you for the extra amount -- plus interest and penalties, of course. Sometimes, though, no such automatic fix will be available, and it'll be up to you to remedy the situation yourself once it's discovered.
ALSO READ: 20% of Americans Are Making This Tax Filing Mistake
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5. Choosing the wrong filing status
It's one thing to fall into the trap of not understanding what the various filing statuses actually mean, or if you just got married or divorced. But many mistakes involving filing status are much less complicated than that. For instance, many returns have no filing status at all, while others have entries for two or more filing statuses. In some cases, taxpayers do things that are mutually inconsistent, such as claiming single filing status but listing two spouses on the return. The following IRS filing-status tool can help give you the right answer for your situation.
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6. Forgetting to sign your return
Tax returns are legal documents, and when you file, you assert under penalties of perjury that the statements you've made are correct. To be effective, your tax return must be signed and dated. Otherwise, the paper carries no legal weight. Keep in mind that for a joint return, both spouses must sign the return.
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7. Putting the wrong bank information on your return
Those who want their refunds by direct deposit should make absolutely sure that they've put the correct banking information on their returns. That means not only getting the account number correct but also putting their bank's routing number on the form as well. This is another reason why paper returns are quickly becoming discouraged, because identity thieves can use these numbers to try to gain access to your accounts.
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8. Leaving out necessary forms or supporting information
Usually it's sufficient simply to have backup information available in case the IRS questions what you've claimed on your tax return. Some documents are more important, however, and so doing things like attaching your Form W-2 to your federal return or putting copies of various federal schedules in with state tax returns can save you the headache of having to answer queries later on.
ALSO READ: 3 Costly Tax Filing Errors You Don't Want to Make
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9. Failing to name a third-party designee correctly
Above where you sign the return, you have the option of allowing someone to discuss your return on your behalf. There's no requirement for you to do this, but if you do, you need to make sure you do so correctly. Check the "yes" box and then put the name and phone number of your designee, and then assign a five-digit personal identification number that you'll tell your designee. Leaving any of those steps out can make it impossible for the IRS to honor your request.
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10. Not putting on enough postage
Last but not least, if you file a paper return, you have to make sure you put enough postage on the envelope for it to actually get to the IRS. Keep in mind that unusually sized envelopes can incur surcharges over regular rates, and so if you have a particularly thick tax return, it can pay to take it to your post office and have attendants actually calculate the correct amount for you.
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Don't let these mistakes snare you
The last thing you need at the end of tax season is to make a dumb mistake that gets the IRS on your back. Be smart about avoiding errors like these, and you'll be able to put your taxes behind you once and for all come mid-April.
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