Tax season is here and Americans can now file their 2022 taxes with the IRS. If you are looking forward to a tax refund this year, filing an accurate and error-free return is the best step you can take to receive that refund as soon as possible.
According to the most recent data from the IRS, approximately 12 millions of returns filed for the 2020 tax year contained a calculation error. According the mistakereporting incorrectly could result in you paying more than you actually owe in taxes or subjecting you to penalties and interest charges
While you can correct many errors on your tax return after filing, it’s much better (and more convenient) to get it right the first time. “You don’t want to change your return unless you have to,” says Luis Rivero Vazquez, CPA and tax director at Taxfyle.
Watch out for these six common mistakes that trip up millions of taxpayers to make sure nothing stands in the way of your return.
1. Make sure you have all your documents before you file
If you haven’t received all the tax documents you need yet (or if you’re not even sure what you need), you’re not ready to file your tax return.
“The most common mistake you’ll see is that a taxpayer will go to an accountant or do their taxes through a self-preparation mechanism and they’ll do it without everything they need,” says Vazquez.
Gather all the documents you need for income you earned through work, such as W-2 forms from all employers you have had during the tax year and any 1099 forms relating to income such as self-employed income. Depending on your financial activity, you will also need forms to investmentshealth savings accounts and retirement income.
The taxman has usefully compiled a list of tax documents and under what circumstances they are required for filing. Be sure to check this before sending your return.
“What could happen is that [a taxpayer will] say ‘oh, hey, I’m getting this huge refund, but I forgot my crypto, or I forgot the small investment I sold and have to pay taxes on.'” Not having all the information you need could mean that you are paying too much or too little of your taxes.
2. Check your credits and deductions
If you claim tax credits or deductions on your return, get out the calculator and make sure your calculations add up. Otherwise, you’re setting yourself up for a potentially costly surprise bill from the IRS.
It’s here that tax preparation software as Turbotax And TaxAct be useful. These programs will guide you through your eligible deductions and credits and help minimize the risk of user error.
On the TurboTax secure site
Costs may vary depending on plan selected – see breakdown by plan in description below
Only for simple tax returns. Not all taxpayers are eligible. See if you qualify.
- Step-by-step guidance with an easy-to-follow Q&A format
- TurboTax Live provides on-demand advice and a final review from a tax expert
- Live Full Service has a tax expert who prepares, signs and files your return
- Accuracy and Maximum Refund Guaranteed*
- Audit Assistance, which provides free assistance if you receive an IRS or other tax notice
- More expensive than other software
- Live expert support plans have additional costs
Breakdown of costs by package:
- Free (For simple tax returns only. Not all taxpayers are eligible. See if you are eligible): $0 federal, $0 state
- Luxury (helps you maximize credits and deductions): $39* federal, $39* state
- First (includes returns with investments and expenses): $69* federal, $39* state
- Self employed (for personal and business income and expenses): $89* federal, $39* state
- Basic live (includes help from tax experts): for a limited time, $0* federal, state included – simple tax filings only; must file before 31/03
- Live Deluxe (includes assistance from tax experts): $89* federal, $49* state
- Live premiere (includes help from tax experts): $139* federal, $49* state
- independent living (includes assistance from tax experts): $169* federal, $49* state
- Full service Basic live (includes help from tax experts; simple tax returns only): $169* federal, $39* state
- Full live service Luxury (includes assistance from tax experts): $219* federal, $49* state
- Full service Live premiere (includes assistance from tax experts): $329* federal, $49* state
- Full service independent living (includes assistance from tax experts): $359* federal, $49* state
*Click on here for TurboTax offer details and disclosures
** A simple tax return is Form 1040 only.
$0 to $48.71 federal, $29.96 to $33.71 state (see breakdown by plan below)
Assistance from tax experts
- Up to $100,000 Accuracy Guarantee, which reimburses you for IRS/State penalty or interest if TaxAct software causes a calculation error in your return
- More affordable than other paid software
- Free one-on-one support from real tax experts with all plans
- Maximum Refund and 100% Accuracy Guarantee, or TaxAct will refund the Plan Fee you paid and pay any difference in refund or tax payable, as well as cover any legal or audit fees up to $100,000
- Free plan fee per status return
Breakdown of costs by package:
- Free (covers single returns only): $0 federal, $29.96 state
- Luxury (helps you maximize credits and deductions): $18.71 federal, $33.71 state
- First (includes returns with investments and expenses): $26.21 federal, $33.71 state
- Self employed (for personal and business income and expenses): $48.71 federal, $33.71 state
While tax software helps prevent math errors from creeping into your statement, it’s still up to you to enter correct data. For example, if you tell the software that you have 4 dependents when you have none, the program has no way of knowing that is incorrect.
3. Review your entire statement
You can’t be too careful when checking the numbers throughout your tax return.
Vazquez recommends paying close attention to your adjusted gross income, any charitable contributions or medical expenses (if you itemize your deductions), and the amount of tax you’ve already paid through payroll deductions or tax payments. estimated taxes.
Whether you did your taxes yourself or have a Certified Public Accountant (CPA) or Enrolled Agent (EA) do it for you, be sure to review the full return.
“You shouldn’t just sign it,” Vazquez says. “As a person, I would like to know ‘Did this match to some extent what I expected?’ If not, can the CPA or EA explain to me why I was wrong?”
Finally, check that your name and social security number are correct – they must match the name and number on your social security card. Finally, verify your bank account number and routing number if you want your refund deposited directly.
4. Confirm your filing status
You have five options to choose your filing status:
- Single, for anyone who is not legally married.
- Joint filing for spouses, when you and your spouse want to file a joint tax return.
- Separate declaration for spouses, when you and your spouse wish to file separate declarations
- Head of household, when you are not married and you pay more than half of the maintenance costs of your accommodation. Additionally, you must have an eligible person living in that home for at least six months. Other rules may also apply to claim this status.
- Eligible widow or widower with one dependent child, where your spouse died within the previous two years (other rules also apply).
If your filing status is wrong, it could be expensive. “You could end up paying way more taxes if you choose the wrong one,” says Vazquez.
If you had a big change in your life (like a marriage Or divorce), check that your filing status is correct before signing and submitting your tax return.
5. Make sure your tax return is signed
When you are done with your taxes, the last step is to sign your return. The IRS reminds taxpayers that a the unsigned tax return is not valid.
If you are filing jointly, both spouses must sign the return. If you are filing as a single person, make sure you have signed your declaration before submitting it.
6. Check that it has been accepted
Do not completely erase your statement from your mind after submitting it. “Get confirmation that your return was filed on time and that you have something that indicates your return with your Social Security number was accepted,” Vazquez says.
This can be done through your accountant or one of the IRS’ online tools, including the where is my refund tool, or by open an online account with the IRS.
Once you are certain that the government has accepted your return, you can congratulate yourself on having successfully completed your taxes for the year.
At the end of the line
A correct tax return helps you receive your tax refund as soon as possible. Check the entire return for common errors or inaccuracies described above, and feel free to rely on tax software (or a professional) if you want peace of mind about the statement.
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