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With 2012 W-2 forms being sent out out already, early filers will begin preparation of their U.S. tax returns before you know it. If you’re like many people who will be expecting a refund this year, you’ll likely want your return to be processed quickly so the money can be burning a hole in your pocket as soon as possible.
Even assuming that you have a fairly simple return, have all of your documentation ready, and prepare your return honestly, there are still a number of common, simple mistakes that may delay processing of your return or even cost you money.
Here are the top five most common errors made when preparing tax returns, according to the IRS.
Incorrect or Missing Social Security Numbers
It’s important to double check the information for everyone listed on your return, including yourself, your spouse, your dependents and qualifying children for the Earned Income Credit or Child Tax Credit. Be sure that both the names and Social Security Numbers are entered precisely as they appear on Social Security cards. If you file a paper return, be sure to enter any corrections to the peel off label, and to enter your Social Security Number in the space provided. If you don’t use the label, make sure you clearly print all of the required information on the return. Don’t forget to include the correct SSN or Tax ID number for child care providers if you’re taking a child care credit.
Incorrect Tax Entered for your Taxable Income and Filing Status
Those tax tables can be difficult to read, especially in the wee small hours of April 15th. Be sure to check only one filing status, and double check the tax table to make sure you’re in the right row and column. You might wish to consider filing your return electronically, or at least using one of the popular tax software packages available if you file your own return. Many common errors will be avoided or corrected automatically by the software.
Computation Errors on Taxable Income, Withholding, EIC, Etc.
Taxable income, withholding and estimated tax payments, Earned Income Credit, Standard Deduction for age 65 or over or blind, the taxable amount of Social Security benefits, and child and dependent care credit computations are where computational errors most commonly occur. Once again, it pays to double check your work or to use an electronic package to prepare your return.
Entering Information on the Wrong Line
Withholding and Estimated Tax Payments are the most common errors here. Also, be sure to enter income, deductions, and credits on the correct lines and double-check for correct totals.
Errors in Addition and Subtraction
Use a calculator. Seriously. Or, once again, software makes these operations pretty foolproof.
Here’s wishing you many happy returns.