It seems like only yesterday that the IRS had opened the filing portal for tax season 2020. Here we are today, where the tax deadline, April 15th seems just around the corner. The tax authorities strongly recommend practicing the electronic filing of taxes. When one chooses to file taxes electronically, software such as QuickBooks and Drake help reduce errors because the tax software does:
- The actual math
- Figures out the calculations
- Flags common errors
- Alerts the taxpayers for missing information or empty fields
The IRS is getting stringent by the day when it comes to tax rules and posing penalties. In order to avoid coming under the IRS radar and penalty lists, it’s best to hire a reputable tax preparer.
Taking the help of an expert such as a certified public accountant, an enrolled agent or someone who has extensive knowledge of tax and is fluently familiar with tax filing can also help in avoiding errors. Mistakes in filing taxes can result in a processing delay, which can ultimately delay getting tax refunds or even worse, put you on the IRS’ letter list.
Here are some of the common errors that should be avoided when preparing a tax return:
1. Fumbled Social Security numbers. Each Social Security Number on a tax return form should be the replica of what’s printed on the Social Security card.
2. Misspelled names. It is one of the most common mistakes to be made on the tax form. The name listed on the tax return form should be the exact match to the name mentioned on the person’s Social Security card.
3. Incorrect filing status. This is an error that can really be avoided by using tax software. Such software helps in flagging out such errors and recommend corrective measures. Some taxpayers get fumbled up and choose the wrong filing status.
Apart from a tax preparation software, the Interactive Tax Assistant (ITA) on the IRS website can also help taxpayers in choosing the correct status, especially when a person falls under more than one filing status.
4. Calculation mistakes. A calculation error is another one of the most common mistakes made by the tax filers. These mistakes range from simple numerical errors or addition subtraction to more complex term calculations.
Taxpayers should make it a practice to always double-check their calculations. Or an even better option is to go for software like QuickBooks, Drake or Sage that would actually do the math for you.
5. Figuring credits or deductions. Another one of the common errors made by taxpayers is tax deductions and credits. Factors such as earned income tax credit, standard deduction, child care, and dependent care credit add up as mistakes when filing taxes. All the pressure and deadlines, aside from the several norms to be followed, aren’t of much help either.
Taxpayers should be vigilant when browsing these criteria and should always follow the instructions carefully. Again, a taxpayer can use The Interactive Tax Assistant on the IRS website to get help in determining if they are eligible for tax credits or deductions. Attach any required forms and schedules supporting the claim.
6. Incorrect bank account numbers. The fastest way for a taxpayer to get their money is to choose direct deposit when filing for a due tax refund.
However, for this to happen in a glitch-free manner, taxpayers have to make sure that the bank account number entered should be correct. One must make sure to re-check and match their bank account number before submitting the tax form.
7. Unsigned forms. An unsigned tax return is not a valid tax return, it is as simple as that. In the majority of joint filing cases, both spouses have to sign the joint return, even if the signature of one counterpart is missing, it makes the return form invalid.
It should be noted that some exceptions regarding the same do apply for members of the armed forces or for other taxpayers who successfully demonstrate having a valid power of attorney. This error is majorly involuntary and can be avoided by filing return electronically, as there is a provision to digitally sign the document before sending it to the IRS.
Making an effort to avoid errors is for the own good of the taxpayer. As it helps in faster processing of tax returns and an even faster tax refund if applicable. It is a known fact that the tax season can be daunting and demanding.
All these numbers, calculations, and data might seem to press against you with the deadline fast approaching. Being calm and vigilant is the key and to ease your task you can always use accounting software or tax software. Switching to E-filing always helps in mitigating errors and processing faster.
Reading Suggestion: Tax Preparers’ Boon: 5 In-Vogue Features of Drake Software
No comments:
Post a Comment