5/9/2021
Candace J. Dixon
Before filing your tax return, make sure it's correct and complete. Even if someone else prepares your tax return, it's important that you review the entire return carefully, because you are still responsible for all of the information entered on your return.
Regardless of who prepares it, Craig W. Smalley, E.A. wrote an article for AICPA Tax Adviser in 2017 called "Reliance on Tax Software Does Not Let Taxpayer Off the Hook" about a Tax Court case in which the Tax Court held that a taxpayer couldn't blame his tax preparation software for deductions that he took on his tax return that were disallowed (Bulakites, T.C. Memo. 2017-79).
In addition to double checking the return for errors, be sure that both you and your taxpayer are aware of all the changes in the tax law this year that may affect your return, many temporary and some unusual due to COVID-19. You could miss out on a credit, deduction or refund if you're not aware!
Avoiding these common mistakes on your tax return will help prevent delays in any refunds.
This checklist can help you to avoid common errors and keep everything organized!
✔️Submit your tax return electronically. This provides greater accuracy than mailing it because e-file software often detects common errors and will reject the return, causing you or your preparer to make corrections before letting it be e-filed with the IRS. Returns that are filed electronically are also processed much faster by the IRS. There are many e-file options, some free. If your AGI is $72,000 or less, IRS Free File lets you prepare and file your federal taxes online for free by using an IRS partner site. If your AGI is higher than $72,000 and you're comfortable doing your return, you can still use IRS Free File Fillable Forms to file online. Your return will also be filed electronically if you qualify for and use The IRS Volunteer Income Tax Assistance (VITA) or Tax Counseling for the Elderly (TCE) programs; if you prepare it with commercial software; or if you go to a tax professional who is an Authorized e-file Provider.
✔️Check that your full name, social security number or taxpayer identification number, and current address, including ZIP code, are correct and clearly printed directly on the return.
✔️Choose only one correct filing status. (If you need help choosing the best one, see What Is My Filing Status)
✔️Verify that any dependent information is entered correctly and completely, and if they qualify for the child tax credit or credit for other dependents, make sure the correct box is checked on the 1040.
✔️ Make sure the names and social security numbers for everyone listed on your return are entered exactly as they appear on their social security cards.
✔️Double check that all of your income is entered on the correct lines, and use Schedule 1 (Form 1040), Additional Income and Adjustments to Income if necessary.
✔️Check that all deductions and credits have been calculated correctly, put on the right lines, and that any necessary forms or schedules are being used.
✔️Make sure that negative amounts have been entered correctly - use brackets, not the minus symbol, to ensure that the IRS computers read the negative entry correctly.
✔️Check that your standard deduction amount is correct. If you use the standard deduction and check any box indicating that you or your spouse are age 65 or older or blind, make sure that the correct amount is being used. (See How Much Is My Standard Deduction? if you need help.)
✔️Make sure that your tax has been figured correctly. If using the tax tables, be sure that the correct column for your filing status was used.
✔️Sign and date the return; if it's a joint return, your spouse must also sign and date it.
✔️If you received an IP PIN (Identity Protection PIN) from the IRS because you've been a victim of identity theft or have voluntarily opted into the IP PIN program to protect your identity (available starting in 2021), make sure the six-digit IP PIN is entered correctly whether you are using electronic or paper tax returns. For e-filed returns, any taxpayer claimed on your tax return who has received an IP PIN, including the IP PIN of any dependent(s), must have it entered on the return. In addition, if you claim a dependent who receives an IP PIN, you must enter it on the 'Form 1040 series' as well as 'Form 2441' and 'Schedule Earned Income Tax Credit'. For paper returns, both the primary taxpayer and secondary taxpayer need to enter their IP PIN(s) as applicable in the boxes marked "Identity Protection PIN" in the signature area of the return. If your software doesn't prompt you and you can't find where to enter it, search within your software for "Identity Protection PIN" or "IP PIN" or contact the help desk so that you can enter it correctly, because an incorrect or missing IP PIN will result in the rejection of your e-filed return or a delay of your paper return until it can be verified. (See The Identity Protection PIN (IP PIN) page here if you need help validating it online.)
✔️Make sure that all of your Form W-2, Wage and Tax Statement forms from your employers are entered correctly and completely, and attach Copy B of each W-2 to your return if mailing it. If you haven't received it or if it's incorrect, contact your employer, and if you still haven't received it in time to file the return, you can use Form 4852, Substitute for Form W-2, Wage and Tax Statement, or Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. to estimate the wages/payments made to you and any taxes withheld. If you receive the W-2 or 1099-R after you've filed your return, you'll need to file an amended return. (Refer to Topic No. 308 and Should I File an Amended Return?)
✔️Make sure than any Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. forms are entered correctly and completely, and attached to the return if mailing it.
✔️Attach all other necessary schedules and forms in the order of the sequence number shown in the upper right-hand corner if mailing the return.
✔️Be sure to use the correct mailing address from your tax form instructions if mailing the return along with the correct amount of postage.
✔️If you owe tax, it's recommended that you pay using Direct Pay with your bank account; however, if you need to pay with a check or money order, make it payable to the United States Treasury, write on the front of your payment your correct name (if it's a payment on a joint return, use the taxpayer listed first on the return), address, social security number, daytime telephone number, tax year, and form or notice number (for example - 2020 Form 1040), and put it loose in the envelope along with the Form 1040-V, Payment Voucher and your federal tax return - don't staple or attach anything. Never send cash!
✔️Don't mail an estimated tax payment for payment of the current year's tax with your tax return. You need to mail it separately to the address shown on the Form 1040-ES, Estimated Tax for Individuals under the section "Where to File Your Estimated Tax Payment Voucher if Paying by Check or Money Order." (You can use Direct Pay to make estimated tax payments for the current calendar year and receive immediate confirmation of your payment.) For other payment methods, see IRS Topic No. 158 - Paying Your Taxes and Ensuring Proper Credit of Payments or Paying Your Taxes.
✔️If you're due a refund and request direct deposit, double-check the routing and account numbers for your bank.
✔️If you owe taxes, you can do an Electronic Funds Withdrawal (EFW) and have it debited from your bank account when you e-file your taxes, but you can only use that method when using tax preparation software or through a tax professional. Be sure that the account numbers are correct and that there are no errors by referring to the EFW Payment Record Item and Instructions page here, because once your return is accepted, information such as account information, payment date, or amount, can't be changed. If changes are later needed, the only option is to cancel it and choose another payment method.
✔️Make sure that you have made and keep copies of the signed return and all schedules and other documentation for your own records in accordance with IRS Recordkeeping guidelines. Generally, you must keep records that support an item of income, deduction or credit shown on your tax return until the period of limitations for that tax return runs out. The period of limitations is the period of time in which you can amend your tax return to claim a credit or refund, or the IRS can assess additional tax. Unless otherwise stated, the years refers to the period after the return was filed. Returns filed before the due date are treated as filed on the due date. Keep records for 3 years from the date you filed your original return or 2 years from the date you paid the tax, whichever is later, if you file a claim for credit or refund after you file your return. Keep records for 7 years if you file a claim for a loss from worthless securities or bad debt deduction. For other exceptions and recordkeeping requirements, refer to our Recordkeeping Requirement page here. Always keep copies of your tax return in case you need to later file an amended return.
Happy Tax Season!