The tax season is upon us, and as individuals and businesses work on their returns, it’s crucial to do it accurately to prevent delays in receiving refunds. The IRS offers tools like “Where’s My Refund” to assist taxpayers in tracking their returns, but common filing mistakes can slow down the process. This article highlights three typical pitfalls and how to avoid them.
Submitting inaccurate or incomplete information
One of the most common mistakes taxpayers make is filing returns with incorrect or incomplete details. Errors such as incorrect Social Security numbers, misspelled names, or incorrect bank account information can lead to processing delays. The IRS emphasizes the importance of verifying all personal information before filing. Moreover, ensuring that dependent information matches what the Social Security Administration has on file can help prevent future complications.
Omitting income sources
Another prevalent error is neglecting to report all sources of income. Wages represent only part of the overall income, which should also encompass freelance work, investment earnings, and any additional income outside of regular employment. The IRS receives duplicate copies of every income statement, and discrepancies between reported income and IRS records can lead to audits or processing delays.
Taxpayers should also examine bank statements and electronic payment platforms such as PayPal, Venmo, and Cash App to ensure that all income sources are accounted for.
Incorrectly claiming deductions and tax credits
Mistakes in claiming tax credits and deductions are also common. For example, buyers of electric vehicles (EVs) have encountered challenges receiving the $7,500 federal tax credit due to their dealerships failing to report the sale to the IRS. This lack of reporting has led to tax returns being denied, causing taxpayers to potentially miss out on the credit. To avoid such mistakes, taxpayers should thoroughly understand eligibility requirements and consider consulting a tax professional when needed.
Utilizing the ‘Where’s My Refund’ Tool
The IRS offers the “Where’s My Refund” tool to check the status of your refund. This online resource provides real-time updates on your return, typically within 24 hours of e-filing or four weeks after submitting a paper return. You’ll need your Social Security number, filing status, and the refund amount claimed. The tool offers three update statuses: return received, refund approved, and refund sent. Taxpayers will be notified if any issues arise.
Guidelines for a Seamless Tax Filing Experience
For a smoother filing process and quicker refund delivery:
- File Electronically: E-filing reduces the likelihood of errors compared to paper filing and speeds up processing times.
- Choose Direct Deposit: Opt for direct deposit to have your refund securely deposited directly into your bank account, minimizing the risk of theft or loss.
- Prepare Tax Documents Early: Ensure you have all necessary documents, such as W-2s, 1099s, and any relevant information regarding deductions or credits before filing.
- Stay Updated on Tax Laws and Changes: Keep informed about any tax changes and laws that could affect your filing. The IRS website is a valuable source of information and updates.
- Seek Professional Help if Needed: If your tax situation is complex, it may be beneficial to consult with a certified tax professional to maximize your refund and minimize errors.
Accurate tax filing is vital to prevent delays and to claim any eligible credits or refunds. Being mindful of common mistakes can simplify the overall process. Stay focused, be diligent now, and sidestep potential headaches later for a more streamlined tax season. Proactivity, planning, and awareness are key to ensuring tax season is hassle-free, with timely refunds processed.
