The intricacy of the present US tax system requires most people to use tax software or hire a tax professional.
The most common tax errors are significantly easier to correct than the home office deduction or overpayment of the child tax credit.
Check our list of typical tax return problems to ensure you obtain your refund on schedule and in full. Fear not if you received a tax return rejection notice and filed on time you have five days to rectify the errors and resubmit, but your refund will be delayed.
The finest free tax software, how to track your return electronically or by mail and 2022’s biggest tax changes and deductions.
1: Filing Taxes Late
The US tax deadline this year is April 18. The IRS believes that 20% of filers wait until the last week to file. That’s fine if you owe the IRS money, but if you’re expecting a refund, you’re playing with fire.
Procrastinating on your taxes provides little opportunity for error, and not filing on time will delay your tax refund. If you owe money to the IRS, you’ll be charged a late filing fee and other penalties.
A six-month extension is free until Oct. 18, but you’ll have to pay estimated taxes and lose money if you expect a return.
2: Misspelling a Name or Using the Wrong SSN
This error is more common than you believe. Enter your full name as it appears on your Social Security card, along with your Social Security number. Your tax return will be rejected if either is not identical.
If your legal name has changed, you must first contact the Social Security Administration to amend it before filing your taxes.
Third error: Incorrect filing status US taxpayers can file as Single, Married Filing Jointly, Married Filing Separately, Head of Household, or Qualifying Widow (er) with Dependent Child. Your file status affects your standard deduction, credit eligibility, and overall tax burden.
3: What Is My Filing Status
can assist you to determine your circumstances and making the appropriate choice. An amended return on Form 1040-X is required if the filing status is incorrect. Tax evasion may be suspected by the IRS.
The child tax credit, earned income tax credit, mortgage interest deduction, child care deduction — many of these tax items have complicated spreadsheets and requirements.
A miscalculation or mistyped number can result in an incorrect tax refund, causing you to lose money or payback an overage with taxes and penalties.
4: Tax software
Quality tax software will collect and calculate all the numbers you need to file your taxes appropriately. All top tax software offers accuracy guarantees that cover any damages or fines incurred due to calculation errors. Tax software will only work properly if you submit correct data, so double-check your numbers before filing.
If you prefer to complete your taxes manually, the IRS Interactive Tax Assistant can help you calculate credits and deductions.
5: Failing to report child tax credit and stimulus payments
Monthly advance child tax credit payments and the third stimulus check must be reported on your 2021 tax return.
If you omit or miscalculate that information, the IRS warns it will “need to evaluate the tax return, causing a significant wait.”
The IRS sent out letters earlier this year with the entire amounts.
Letter 6475 for your stimulus cheque and Letter 6419 for your child tax credit. If you didn’t get the letters or threw them out, you can look them up online using an IRS account.
6: Incorrect Bank Account or Routing Numbers
The IRS says you’ll get your refund in roughly 21 days if you file electronically. Not if you provide the erroneous bank account or routing number on your tax return. No changes can be made once the IRS has approved your return.
If the IRS cannot electronically deposit your refund into your bank account, it will send you a paper check to the mailing address on your tax return, which should arrive in six to eight weeks.
If you unintentionally provide someone else’s valid account and routing details on your tax return, the IRS may deposit your refund into their account. To establish your identification and provide paperwork, you’ll need to contact the bank. After the bank returns the funds, the IRS will mail you a paper check.
7: Unsigned Tax Returns
Filing a paper tax return slows down your refund. If you file it without a signature, the IRS will reject it and require you to re-file, which takes time.
If you’re married and filing jointly, both partners must sign. Military personnel serving overseas and others seeking power of attorney are exempt.