With the deadline for filing federal income taxes slowly creeping up on us, the Internal Revenue Service is reminding taxpayers to check their tax returns for common errors that could delay refunds or otherwise affect normal processing. Here are some ways to avoid tax return slip-ups as the May 17 due date gets closer.

Use electronic filing

Filing electronically, whether through IRS Free File or other e-file service providers, is a good way to cut the chances for many tax return mistakes and maximize deductions to reduce tax owed at the same time. The tax software automatically applies the latest tax laws, checks for available credits or deductions, does the calculations, and asks taxpayers for all required information.

Report all taxable income

Be sure to have income documents on hand before starting the tax return process. Examples include Forms W-2, 1099-MISC or 1099-NEC. Underreporting income may lead to penalties and interest.

Make sure to get names and Social Security numbers right

Enter each Social Security number and individual’s name on a tax return exactly as printed on the Social Security card. Persons generally must list on their individual income tax return the Social Security number of any person they claim as a dependent. If a dependent or spouse does not have and is not eligible to get a Social Security number, list the Individual Tax Identification Number instead.

Learn about filing status

If taxpayers are unsure about their filing status, the Interactive Tax Assistant on IRS.gov can help them choose the correct status, especially if more than one filing status applies. Tax software, including IRS Free File, also helps prevent mistakes with filing status.

Correctly answer the virtual currency question

The 2020 Form 1040 asks whether at any time during 2020, a person received, sold, sent, exchanged or otherwise acquired any financial interest in any virtual currency. If a taxpayer’s only transactions involving virtual currency during 2020 were purchases of virtual currency, they are not required to answer ‘yes’ to the question.

Mail paper returns to the right address

Paper filers should check the right address for where to file on IRS.gov or on form instructions to avoid processing delays. Note that due to staffing issues related to COVID-19, processing paper tax returns could take much longer than usual. Taxpayers and tax professionals are encouraged to file electronically if possible.

Use the right routing and account numbers

Requesting direct deposit of a federal refund into one, two or even three accounts is convenient and allows the taxpayer access to his or her money faster. Make sure the financial institution routing and account numbers entered on the return are accurate. Incorrect numbers can cause a refund to be delayed or deposited into the wrong account. Taxpayers can also use their refund to purchase U.S. Savings Bonds.

Make sure to sign and date the return

If filing a joint return, both spouses must sign and date the return. E-filers can sign using a self-selected personal identification number.

Keep a copy

When ready to file, taxpayers should make a copy of their signed return and all schedules for their records.

Request an extension, if needed

Taxpayers who cannot meet the May 17 deadline can easily request an automatic filing extension to Oct. 15 and prevent late filing penalties. Use Free File or Form 4868. But keep in mind that while an extension grants additional time to file, tax payments are still due May 17.

Scott Carroll can be reached at scarroll@nrtoday.com or 541-957-4204. Or follow him on Twitter @scottcarroll15.

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(1) comment

NJ

They used to teach high school seniors the information in this article and a number of other things about living independently as an adult. The class was called Modern Problems. Today, I see only one class in the RHS curriculum that is certainly informative, but doesn't quite cover everything a brand new adult will encounter in real life.

The class: Surviving Life After High School, Grade Level: 11, 12 - The purpose of this transition class is to better prepare students for post-secondary living by researching student career choices, skills, abilities, interests, and education requirements for enrollment in colleges or universities. The class also addresses budgeting, financial issues (i.e. financial aid for college), credit/debt awareness, needs vs. wants, etc. Upon completion of this course, students will have a

personal portfolio containing research of careers, colleges, skills, interests, and abilities, as well as a resume, letters of reference, sample job application, transcripts, and their culminating research project presentation.

An excellent class to prepare for higher education and the process of getting there and very probably a class that parents should attend with their student. But Modern Problems helped brand new adults clue into living independently and were introduced to banking, budgeting, insurance, living expenses, and basic law enforcement. The Elective Home Economics offered up real life in practical living - mainly practical budgeting your income for your home. It was a different time, but the quality of information is still needed for young adults.

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