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IRS Covid Tax Tips

Recently, the IRS sent out an email to taxpayers that detailed how people who have yet to file a 2021 tax return should do so electronically in order to avoid common mistakes. You may have received this email yourself, as the IRS utilized their mailing list for those subscribed to it. Whether you meant to sign up or not, the information provided proves to be extremely useful. In this article, we will summarize the tips the IRS sent out and how exactly they can be helpful.

Why should I file electronically?

The first thing the IRS mentions in their email is that you should file your taxes electronically. The main subject of the email actually tells you to file electronically in order to avoid the mistakes that we will discuss shortly. But why is this the case? One main reason the IRS recommends that you file your tax returns electronically is that it avoids errors. The software that the IRS uses automatically calculates any math, looks for and flags common errors, and prompts taxpayers for any missing information. This is all very important, as one of the main reasons the processing of your tax returns may be delayed is because of human error. Something as small as a simple typo has the potential to cause issues down the line. This can for the most part be avoided with this software.

Common mistakes made when traditionally filing

The following is a list of some of the most common mistakes taxpayers should avoid when traditionally filing for their taxes. This list comes directly from the email that was sent by the IRS and is based on mistakes they are used to seeing the most from taxpayers.

  • Missing or incorrect Social Security numbers – This one is about as straightforward as it sounds. Entering a correct Social Security number is extremely important, as it verifies your identity. Even if you know your Social Security number by heart, you should still verify that it matches your Social Security card to be extra safe.
  • Misspelled names – This is similar to the previous item on the list, and the solution is also the same. The name you put on your tax return should match what’s on your Social Security card. This name in addition to your Social Security number helps to prove your identity.
  • Inaccurately entering information – This pretty much refers to making mistakes with any of the numbers on your tax return. Information such as wages, bank statements, or any other source of income needs to be entered carefully. The tax software the IRS uses for electronic filing can accurately calculate any information entered, but if the information entered is inaccurate, you can run into problems down the line.
  • Incorrect filing status – Your filing status is used to determine what requirements you have for filing, any deductions/credits you may be eligible for, and your correct tax amount. If you aren’t 100% sure what your filing status is, you can head to the IRS website and use a tool they have that’s dedicated to determining it. This can be especially helpful if more than one filing status applies to you.
  • Math mistakes – Math isn’t everyone’s best subject, which can lead to some errors on your tax return. Whether you added instead of subtracting or weren’t sure how to use a certain formula, math mistakes are all too easy to make. As mentioned before, the IRS software can automatically do the math for you in order to avoid this.
  • Figuring out credits or deductions – It can be very easy to make a mistake when figuring out what credits or deductions you may be eligible for on your tax return. Most tax software, including the IRS’, can calculate this for you automatically.
  • Incorrect bank account numbers – This one is pretty straightforward. It’s important that you use the correct bank account number on your tax return. Double-check your bank information to ensure it’s accurate.
  • Unsigned forms – One of, if not the most important things you can do on a tax return is to make sure you sign it. If it isn’t signed by all the necessary parties, it will be considered invalid.

Conclusion

We now know some of the most common mistakes taxpayers make when it comes to filing their tax returns. Feel free to refer to this list whenever you’re filing your next return and want to make sure everything is accurate. As mentioned before, filing electronically with the IRS software is a great way to ensure you don’t make these mistakes. In addition to this tool, the IRS email also mentions that you can use a reputable tax preparer to ensure your information is accurate. Jacobwise & Co is one such tax preparer, and we would be more than happy to assist you with any of your tax needs.

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