1. FORGETTING to sign and date the return: An unsigned tax return is considered unfiled.
2. Missing or wrong Social Security Numbers: When entering SSNs for anyone listed on your tax return, be sure to enter them exactly as they appear on the Social Security cards.
3. Misspelled or wrong dependent’s last name: When entering a dependent’s last name on your tax return, ensure they are entered exactly as they appear on their Social Security card.
4. Filing status errors: Make sure you choose the correct filing status for your situation. There are five filing statuses: Single, Married Filing Jointly, Married Filing Separately, Head of Household, and Qualifying Widow(er) With Dependent Child. See Publication 501, Exemptions, Standard Deduction, and Filing Information to determine the filing status that best fits your needs.
5. Incorrect bank routing or account numbers for Direct Deposit: If you are due a refund and requested direct deposit, be sure to review the routing and account numbers for your financial institution.
6. Math errors: When preparing paper returns, review all math for accuracy. Remember, when you file electronically, the software takes care of the math for you!
7. Computation errors: Take your time. Many taxpayers make mistakes when figuring their taxable income, withholding and estimated tax payments, Earned Income Tax Credit, Standard Deduction for age 65 or over or blind, the taxable amount of Social Security benefits, and the Child and Dependent Care Credit.
8. Incorrect Adjusted Gross Income information: 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 2008 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.
9. Claiming the Making Work Pay Tax Credit: Taxpayers with earned income should claim the Making Work Pay Tax Credit by attaching a Schedule M, Making Work Pay and Government Retiree Credits to their 2009 Form 1040 or 1040 A. Taxpayers who file Form 1040-EZ will use the worksheet for Line 8 on the back of the 1040-EZ to figure their Making Work Pay Tax Credit. The credit is worth up to $400 for individuals and $800 for married couples filing jointly. Many people who worked during 2009 are slowing down the processing of their tax return by not properly claiming this credit.
10. Mailing tax returns with payment due to the wrong IRS service center. Each year, the IRS changes processing centers where tax returns are mailed.
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Victor Santos Sy, CPA, MBA, provides professional services in accounting and tax controversy including IRS audit defense and offers in compromise. He also advises clients on choices of entity including corporations for small businesses and LLCs for rentals. Vic worked with SyCip, Gorres, Velayo (SGV – Andersen Consulting) and Ernst & Young before establishing Sy Accountancy Corporation at 704 Mira Monte Place, Pasadena, CA 91101. The firm celebrates its 35th anniversary this year. You may email tax questions to Vic at [email protected]. You are welcome to visit our website for more than 300 tax tips at www.victorsycpa.com.