Nine Common Errors Made on Tax Returns

Errors made on tax returns may delay the processing of your return and the arrival of your refund. Avoiding the common errors below will help ensure your refund arrives on time:

  1. Recovery Rebate Credit – Many returns filed in 2009 have errors involving the Recovery Rebate Credit, a credit for people who did not receive a stimulus payment in 2008 or who did not receive the maximum amount. To avoid delays in tax refunds, it is critical that taxpayers know whether they received a payment in 2008 and the correct amount of that stimulus payment. For people using a paper tax return, the stimulus payment amount will be required when completing the related worksheet. For people using tax software, the stimulus payment amount will be needed as part of the return preparation process.
  2. Incorrect or missing social security numbers – When entering SSNs for anyone listed on your tax return, be sure they are entered exactly as they appear on the social security cards. Incorrect or transposed numbers will cause delays in the processing of your return.
  3. Incorrect or misspelling of dependent’s last name – When entering dependent’s last name on your tax return, ensure they are entered exactly as they appear on the social security cards. Incorrect or misspelling of dependent’s last name will cause delays in processing of your return.
  4. Filing status errors – Make sure you choose the correct filing status for your situation.
  5. Math errors – When preparing paper returns you should review all addition and subtraction to ensure it is correct. Remember, when you file electronically, the software takes care of the math for you!
  6. Computation errors – Take your time. Many taxpayers are making mistakes when figuring the taxable income, withholding and estimated tax payments, Earned Income Credit, Standard Deduction for age 65 or over or blind, the taxable amount of social security benefits, and child and dependent care credit.
  7. Incorrect bank account numbers for Direct Deposit – If you are due a refund and requested direct deposit did you check your financial institution routing and account numbers?
  8. Forgetting to sign and date the return – An unsigned tax return is like an unsigned check – it is invalid.
  9. 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 2007 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.

Will Your Social Security Benefits Be Taxed?

For many, it can be confusing to determine how much of your social security benefits are taxable, if any. It typically depends on your total income and marital status. For example, if social security benefits were your only income in 2008, those benefits are not taxable at all, and you will most likely not need to file a return. If you have other sources of income, it may be more complicated, and you may be required to file a return.

Are your social security benefits taxable?
Are your social security benefits taxable?

If you have other sources of income in addition to your social security benefits, those benefits will not be taxed unless your modified AGI (adjusted gross income) is greater than the base amount for your filing status. You can determine what your status is through worksheets in the Form 1040A or Form 1040 Instruction booklet, through free tax software like TaxACT.

The IRS has offered these tips for those trying to determine whether their benefits are taxable.

Before you go to the instruction book, do the following quick computation to determine whether some of your benefits may be taxable:

  • First, add one–half of the total social security you received to all your other income, including any tax exempt interest and other exclusions from income.
  • Then, compare this total to the base amount for your filing status.  If the total is more than your base amount, some of your benefits may be taxable.

The 2008 base amounts are:

  • $32,000 for married couples filing jointly
  • $25,000 for single, head of household, qualifying widow/widower with a dependent child, or married individuals filing separately who did not live with their spouses at any time during the year
  • $0 for married persons filing separately who lived together during the year
    For additional information on the taxability of social security benefits, see IRS Publication 915, Social Security and Equivalent Railroad Retirement Benefits. Publication 915 is available on the IRS Web site at IRS.gov or by calling 800-TAX-FORM (800-829-3676).