Tax season is in high gear, and April 15 is creeping closer, April 30th for Canadian readers. However, it’s important to double check your tax return — even if it is prepared by someone else. Anyone can make a mistake, and the information entered into a tax prep program is only as good as what you put in. Before you hit “send” on your electronic filing, or before you put your paper return in an envelope, carefully check for these 10 common filing mistakes:
1. Social Security Number:
Double check the Social Security Numbers for you, your spouse and your dependents. Everyone’s numbers should be on the form, and they should all be correct. Also, realize that multiple people can’t claim one dependent. This is a common mistake among siblings who contribute to their parents’ care.
2. Identification numbers:
If you plan to take a credit for child care or some other purpose, you will need the correct identification numbers. This goes for the identification numbers of those you pay as part of a business you own.
3. Filing status:
Make sure your filing status matches up with your spouse’s. You can’t be married filing jointly, while your spouse marks that you are married filing separately. You also need to make sure you have checked the right box if you are single, or filing as head of household. And remember: You can only have one filing status.
Is your address filled in correctly? I have to admit that I once transposed two numbers on my address. Luckily, the nice people across the street who received my tax refund were kind enough to bring it by.
5. Financial institution:
If you are having your refund direct-deposited, make sure all of the information is correct. This means you need to have your bank’s routing number correctly entered, as well as your bank account number. I’m guilty of this mistake as well. It took for-ev-er to get it all straightened out, and in the end I got a paper check anyway.
6. Unsigned return:
After putting it all together, there are a number of folks, according to the IRS, who neglect to sign the return. If you owe money, this could actually result in interest penalties being assessed. If you are married and filing jointly, your spouse needs to sign the return as well.
7. Undocumented deductions:
This is a biggie. When you file a tax return — especially if you itemize — you need to have documentation to back up your deductions. Charitable deductions need to be accompanied by receipts showing the date, amount and name of the non-profit. You should also have documentation to back up deductions you take for medical expenses, property taxes, mortgage interest and business expenses.
Double check your credits. You should also do a rundown of new credits. There are more than 300 changes to the tax code for 2009 taxes. This means that you might eligible for some credits you don’t even know about. On the flip side, double check your eligibility for the tax credits you do take. Many people claim credits they shouldn’t, and that can mean interest and penalties.
Just like you had to double check your math in high school, it is a good idea to double check your math work on your tax return. Math errors can lead to still greater errors later in your form. Get out the calculator and make sure you’ve added and subtracted properly.
10. Tax computation:
Go over your deductions sure have correctly added up your taxable income. This is one of the mistakes that can cost you big, if you aren’t careful. Then, when figuring your tax liability, make sure that you are in the right column of the tax table. After you have determined your tax requirement, take a short break, and then look at the table again — just to be sure.
Your tax return is an important document, and it is easy to make mistakes. Before submitting it in any form, look over the completed return and check for errors. This applies even when a professional has prepared your return. Do a check to make sure everything really is in order, and you will be more likely to avoid errors that could cost you in terms of time and money.