Learn To Save More
Find out about typical tax return errors; May 17 deadline nears (an article from the IRS.Gov page)
The Internal Revenue Service today reminded taxpayers to check their tax returns for usual errors that can delay reimbursements or otherwise impact normal processing. Right here are some methods to avoid income tax return errors as the May 17 due day gets closer.
Use electronic filing. Filing online, through e-file authorized companies, is a great way to cut the opportunities for many income tax return mistakes and also optimize deductions to lower tax owed at the same time. The tax software application immediately uses the most recent tax laws, checks for available credit scores or deductions, do the estimations, and asks taxpayers for all required information.
“Make sure you file your return online, provide your information correctly to avoid any possible penalty and interest that the IRS may charge you.”
Report all taxable income. Be sure to have income records on hand before starting the income tax return. Examples are Forms W-2, 1099-MISC, or 1099-NEC. Underreporting earnings may result in penalties and interest.
Get names and also Social Security numbers right. Enter each Social Security number (SSN) as well as individual’s name on an income tax return precisely as printed on the Social Security card.
Individuals normally must provide on their individual income tax return the SSN of anybody they claim as a dependent. If a dependent or partner does not have as well as is not qualified to obtain an SSN, list the Individual Tax obligation Identification Number (ITIN) instead of an SSN.
Find out about filing status. If taxpayers are not sure regarding their filing status, the Interactive Tax Assistant on IRS.gov can help them pick the right standing, particularly if more than one declaring status uses. Tax software, including IRS Free File, also helps prevent mistakes with filing status.
Correctly address the virtual currency question. The 2020 Form 1040 asks whether at any time during 2020, a person received, sold, sent, exchanged or otherwise acquired any financial interest in any virtual currency. If a taxpayer’s only transactions involving virtual currency during 2020 were purchases of virtual currency, they are not required to answer “yes” to the question.
Mail paper returns to the right address. Paper filers should check the right address for where to file on IRS.gov or on form instructions to avoid processing delays. Note that due to staffing issues related to COVID-19, processing paper tax returns could take much longer than usual. Taxpayers and tax professionals are encouraged to file electronically if possible.
Use the right routing and account numbers. Requesting direct deposit of a federal refund into one, two or even three accounts is convenient and allows the taxpayer access to his or her money faster. Make sure the financial institution routing and account numbers entered on the return are accurate. Incorrect numbers can cause a refund to be delayed or deposited into the wrong account. Taxpayers can also use their refund to purchase U.S. Savings Bonds.
Sign and date the return. If filing a joint return, both spouses must sign and date the return. E-filers can sign using a self-selected personal identification number (PIN).
Keep a copy. When ready to file, taxpayers should make a copy of their signed return and all schedules for their records.
Request an extension, if needed. Taxpayers who cannot meet the May 17 deadline can easily request an automatic filing extension to October 15 and prevent late filing penalties. Use Free File or Form 4868. But keep in mind that while an extension grants additional time to file, tax payments are still due May 17.