Small mistakes can have huge consequences when the mistakes appear on your tax return. At the very least, the processing of your return is likely to be delayed, which can create real problems if you're counting on your refund. And in some cases, a mistake on your return could even increase your risk of being audited. Know the most common tax return mistakes so that you can be extra careful to avoid them.
Wrong Social Security numbers
The IRS says that getting Social Security numbers wrong on tax returns is one of the most common errors it sees. A mistake with a Social Security number can be as simple as making a typo when you enter it into your tax preparation software. Or perhaps you misremembered what your children's Social Security numbers were when you entered them as dependents. An incorrect Social Security number is likely to bring some pretty serious IRS scrutiny, since that's a red flag that the return may be filed by an identity thief and therefore fraudulent. So before you hit submit, drag out your Social Security card and the cards of your spouse and dependents and confirm that you have all those numbers right.
Wrong filing status
Taxpayers can choose from several different filing status options (single, married filing jointly, head of household, and so on) when preparing a federal tax return. In some cases, choosing the wrong one won't cause a problem with your returns processing but will probably cost you extra in taxes. For example, if you qualify for the head of household filing status but choose single instead, you'll miss out on the larger standard deduction that head of household filers can claim, as well as getting stuck with a more expensive set of income tax brackets for determining your rates. In other cases, the wrong filing status may cause your return to get rejected -- for example, if you choose married filing jointly when you're not married. Either way, selecting the wrong filing status will definitely lead to headaches.
After spending hours and hours working on your tax return, it's not surprising if you can no longer spell your own name. All joking aside, providing the wrong name on a tax return is a remarkably common error. Remember that your name (and your spouse's, and your dependents') has to match the name on the person's Social Security card exactly. If your name is spelled wrong on your Social Security card or it's an outdated name -- for example, you got married and changed your last name -- then contact the Social Security Administration and get it fixed. In the meantime, however, you'll need to use the name as it appears on your card for purposes of filing your tax return.
If you use tax preparation software to complete your return, it will usually do all the math for you and won't make any arithmetic mistakes. However, as computer programmers say, "garbage in, garbage out." That means that if you enter the numbers wrong in the first place, you'll get the wrong results no matter how perfect the computer's calculations are. So even if you're using a computer to do your taxes, it's important to double-check all numbers and make sure they match up with the numbers provided on your tax documents.
For example, when you enter your wages for the year from your W-2, it's rather easy to put the decimal point in the wrong place or transpose two digits -- but such an error could generate some pretty wacky results on your return, not to mention subjecting you to IRS scrutiny. Remember, the IRS gets copies of your W-2 and other tax documents as well, and if the numbers you put on your return don't match those documents, the agency's computers will red-flag your return and you could well get audited as a result.
If you decide to prepare your own return, the best way to avoid mistakes is to do the work in two separate sessions. Fill out your tax return, then set the documents aside for at least 24 hours. After that time has elapsed, come back to the return and double check all the names, numbers and calculations on the return. By coming back to it with a fresh mind, you're more likely to spot errors and get them fixed – before the IRS can call them to your attention.