Filling out tax return forms is a very hard task for both business owners and CPAs. Not only because its process flow is meticulous, but it also takes pure analyzation, hard work and time (as you and your trusted CPA gets busy during filing season).
Every detail counts in a tax return because one little slip may cost you liabilities in your business, and it might delay the processing of your refunds. Who wouldn't want refunds in their return right? So, one of the best remedies is to avoid these mistakes from the get go. Today, I will share to you 9 common mistakes in filing tax returns.
Many taxpayers are having that same problem when it comes to late filing of tax returns. Of course, as per rules it's better that you never be caught up with the deadline. You can still file for a request of extension, but if you want faster process for your tax return and your refunds, then you really have to file it as soon as possible.
With the help of technology, processing of tax returns became somewhat easy, thanks to e-filing. Not only it eliminates a lot of form duplication than traditional paper filing, but it also saves tax filers from lots of calculating amounts, since most e-file application provides automatic calculation.
E-filing saves time for employees when it comes to calculation, but still taxpayers and preparers must make sure that all the amounts that they will enter to the form are precise and correct, so you should always do re-checks.
This is one of the few common mistakes taxpayers often commit in an online tax return form. They thought they've already filled out the things they need, then the IRS noticed that fields like e-signature, address and others are incomplete, and documents like forms and schedules aren't attached with the return. Result — delay of processing.
Another issue is tax return which shows different SSNs (Social Security Number). One of the things that you can do about it is for you to check your return as well as your w2, and see if both forms shows the same SSN.
Yet another case is when your mailing address does not match with your permanent address. You must make sure that the location that you'll be putting in your tax return is your real property address, so that there will never be any miscommunication between you and the IRS.
The rule is simple: You must confirm with the IRS that every earnings that you have will be included in your tax return. Now, as per contractors who are earning money from additional jobs or other related works, you will actually receive forms like 1099- MISC which provide details on your additional work and earnings. You must assure that this document and others related to this one are attached with the return to avoid further liabilities.
One of those factors which forces the IRS to slow down the processing of the return are issues with names of taxpayer or family members whose names does not match tax identification numbers. These cases often happen to wives, especially when they change the last name when they get married. There are also cases in returns in which names in both TIN and name control also did not match.
If you are using direct deposit as a medium on getting your refunds, then you should also make sure that you provide the correct information. Having your bank account numbers and routing numbers all set up will keep you on knowing you're in a safe zone once you get your refund.
To avoid further errors on filing your tax returns, always remember to be patient once you start processing these forms. Patience is like a chinese puzzle box in which you should never rush just to get those tax returns finished. It's actually okay to ask for an extension, as long as the data present in your tax return is complete, and precise.
Don't forget to plan and gather information from previous returns in order for you to identify the right data to be entered in your tax return, and of course, you should always be vigilant with all the rules of the IRS. Always keep yourself updated with the happenings and publications so that you would be confident that you never missed any detail once you submit the forms.