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Common Tax Return Mistakes

In April of 2018, a few days ahead of the 2017 tax filing deadline, the IRS published an article listing the 8 most common mistakes found on tax returns.  At least half of these mistakes can be mitigated by using an electronic filing method, HOWEVER, even those won’t help you spell your own name correctly, folks.

Missing or inaccurate Social Security Numbers. SSNs are issued at birth (if applied for) for the primary purpose of tracking lifetime earnings and number of years worked (Investopedia Article).  They’re a required form of identification to apply for most above-board jobs, admission into schools, and even purchasing auto insurance policies these days.  Step one to adulting: know your SSN.

Misspelled names. The name listed on your tax return must exactly match the name listed on your social security card.

Math mistakes. This one is more understandable if you try to prepare a tax return with no software.  In most cases you’ll need the four basic math operations in your toolbox (addition, subtraction, multiplication, and division); even if you can do those accurately it can still be confusing which numbers to plug in where.  If people who prepare tax returns for compensation use software to avoid math mistakes, so should you. (Check out IRS Free File here, although I haven’t found it incredibly user friendly).

Figuring credits or deductions.  This one is where even professional tax preparers can goof up.  Though usable, IRS help and forms surrounding the complicated Earned Income Credit can be confusing in their thoroughness.  Even the IRS instructions for itemized deductions are 17 pages long (including the sales tax tables that will do some math for you).  Software will run the numbers and limitations for you, but there is almost an infinite number of mistakes that could occur when claiming credits and deductions.

Incorrect bank account numbers.  ABA routing numbers are all 9 digits long and considered public information – you can usually google them.  Account numbers can vary in size and I have personally seen someone put their member number (identifying number at a credit union) on their tax return instead of their account number.

Unsigned forms.  “An unsigned tax return isn’t valid” (IRS). End of story.

Filing with an expired ITIN.  An ITIN is used for tax filing purposes if an individual does not have and cannot obtain a social security number.  A timely-filed return using an expired ITIN will still be processed, but the IRS won’t pay out any refunds at that time.  There’s no specific time frame listed on the IRS website for how long an ITIN lasts before expiring, just that it will expire if not used on a tax return in three years or if you get a letter in the mail saying it will expire. Second step to adulting: open your mail.

Original article here.