The IRS just released a list of the 9 most common mistakes on recently filed tax returns. Make sure you check each one of these as you send in your taxes over the next few days.
1. Recovery Rebate Credit
Many returns filed in 2009 have errors involving the Recovery Rebate Credit, a credit for people who did not receive a stimulus payment in 2008 or who did not receive the maximum amount. To avoid delays in tax refunds, it is critical that taxpayers know whether they received a payment in 2008 and the correct amount of that stimulus payment. For people using a paper tax return, the stimulus payment amount will be required when completing the related worksheet. For people using tax software, the stimulus payment amount will be needed as part of the return preparation process.
2. Incorrect or Missing Social Security Numbers
Make sure you are entering the correct Social Security numbers on the return. Double check them against you and your dependents Social Security Cards. If you incorrectly enter a Social Security number, the IRS will reject your return and ask for the corrected number.
3. Incorrect or Misspelling of Dependent’s Last Name
When you enter your dependent’s last name on the return, be sure you are entering it the same as it appears on their Social Security card.
4. Filing Status Errors
Make sure you enter your correct filing status on your return. It will be either single, head of household, qualifying widow, married filing jointly or married filing separately.
5. Math Errors
This is a pretty obvious one. Just be sure to double check everything on your return, especially if you are filing by hand. Get out that handy dandy calculator! Keep in mind that when you file electronically, the software takes care of the math for you.
6. Computation Errors
Take your time when doing these. Many taxpayers are making mistakes when figuring the 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. Be sure to double check these and also be sure you are utilizing the IRS forms.
7. Incorrect Bank Account Numbers for Direct Deposit
This is a really important one! If someone else is filing your return, make sure you double check to make sure the numbers are correct. I actually heard of a man who put the wrong account number on his return and then the individual that received his refund spent the money. He is now working with the IRS to try and get back his refund.
8. Forgetting to Sign and Date the Return
How obvious is that one?
9. Incorrect Adjusted Gross Income
Taxpayers filing electronically must sign the return electronically using a personal identification number. To verify their identity taxpayers will be prompted to enter their AGI from their originally filed 2007 federal income tax return or their prior year PIN if they used one to file electronically last year. Taxpayers should not use an AGI amount from an amended return, Form 1040X, or a math error correction made by IRS.
You also use your 2008 AGI to calculate many other things on your return. Making sure that this amount is correct can save you a ton of money!
Why does the IRS make the taxable SS income calculatioon so damn complicated?
A simple calculation can be done on the computer by entering the figures that are on the 1040A.
I missed the line where is added two figures instead of subtracting one from the other. and wound up with a 10K greater taxable figure than I should have had.
The IRS will catch most math errors, but this one was in their favor, and the program they use did not raise a flag. Hence I will use 1040X and try to work my way through another form.
So much for making life complicated for the retiree.
Another pain in the butt is the new form Exhibit L which you have to work your way through to get credit for other deductions.
Damn lawyers!!