Common Errors Found on Tax Returns

in Tax Information

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When most people think of likely errors on their tax returns, the first thing that comes to mind is mathematical errors; incorrectly calculating or reporting the various amounts asked for on the return. Although it is true that mathematical errors are common, they have been declining as more and more people use some form of tax software to fill out their annual returns. Most modern tax preparation software comes with built in calculators that highlight any errors before the person using it finishes filling out the return, much less prints it off or electronically files it.

Instead, many of the more common errors today relate to incorrect personal information as this is something that no tax preparation software can detect or correct. Essentially, whenever the personal information on a tax return does not match the information on record with the Internal Revenue Service (IRS), the return is immediately rejected and the taxpayer is notified of the problem. When a tax return is rejected, it is not considered filed – even if the erroneous return was filed on time – which means it is a good idea to not wait until the last minute to file, even if the filing is done electronically. One simple typo on the Social Security Number (SSN) is enough to have the entire return rejected and can result in penalties for late filing and other problems.

The IRS has eight specific error codes that relate to incorrect personal information, each of which can result in the return being rejected. The most common problems are: (a) an incorrect SSN for either the filer or any other person claimed on the return (spouse, dependents); (b) the SSN does not match the surname on record with the Social Security Administration (a fairly common problem for women that have recently married and changed their names); (c) the date of birth reported for either the primary filer or any other person listed on the return does not match the date of birth in the IRS records; or (d) one or more people listed in the return – as identified by the SSN – have been reported on another return by another person. Basically any error related to the name, date of birth, and SSN of anyone mentioned on the tax return can result in it being rejected. A common example is people that report their children as dependents and use an informal name for the child that does not match the name recorded with the Social Security Administration. Though perfectly innocent, this mistake will likely result in the return being rejected.

Another common error made by people that file paper returns is simply forgetting to sign and date the paper return. This is not a problem for people filing electronically, but there are a large number of circumstances when the IRS will not accept electronically filed returns and other people just prefer to file on paper. Related to this, if the filer is sending in a check, they sometime forget to sign and/or date the check, which will also result in the return being rejected.

Although filers should obviously ensure that the math is correct, errors related to personal information – names, dates of birth, and SSNs – are more common today and easier to overlook.


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