How to Cut Down on Late Tax-Filing Errors
Procrastinators, beware! If you haven’t filed your personal tax return, you are among the most error-prone group of taxpayers, according to the IRS.
The bulk of the errors made by last-minute filers are simple, careless mistakes. And they can cost taxpayers both time and money.
Tax experts have a handful of suggestions to help last-minute filers avoid the most common pitfalls.
* Check for proper postage. Some people just don’t put enough stamps on the envelope to get it delivered to the IRS.
This may be a minor glitch, but it takes on added significance for last-minute filers because there may not be enough time for them to get the envelope back and re-posted before April 15. If they don’t, they could be assessed late filing and payment penalties. Late filing fees amount to 5% per month (or fraction of month) of the tax owed. Late payment fees are one-half of one percent per month. In other words, someone who owes $1,000 might face a $50 late filing fee simply for the lack of an additional stamp.
* Names, addresses and Social Security numbers: Taxpayers are well advised to use the IRS-supplied address labels or be particularly careful about filling in these first lines of the return. According to the IRS, this is where many careless errors are found-- errors that can significantly delay your refund, if a refund is due.
Why? The IRS runs a computer check to verify that the Social Security number given matches the name on your return. If it doesn’t, the return is kicked out from the automatic processing system and into the hands of an agent. Usually, that agent then sends you a letter requesting the accurate information, thus delaying your refund at least six to eight weeks, tax experts say.
* Signatures. You sent your return but forgot to sign it? Technically, your return is not filed.
If you owe tax, the IRS this year is likely to give you a break and keep your return on file, said Jan Gribbon, an IRS spokeswoman. But it will require you to send it a signed statement within 45 days. If you fail to return the statement in the allotted time, you start ringing up late filing fees.
Meanwhile, if you’ve forgotten to sign the return and the IRS owes you money, it will send the whole thing back, Gribbon said. At a minimum, that will stall your refund by several weeks. Some individual schedules and forms require signatures as well.
* Math. Some 10% of the tax returns filed contain at least one math error, tax experts say. While these errors usually won’t result in a rejection of your return, they can cause refunds to be delayed. Double-check your math before you file.
* Missing forms. Be sure to include all W-2s, necessary schedules and forms. Failure to send all the appropriate documents will slow refund payments. Sometimes a missing form can result in an audit.
* Unclaimed deductions. Many late filers are so anxious to get their returns in that they’ll forgo legitimate deductions because they’ve misplaced the required documents or don’t want to be bothered filling out an extra schedule, said John T. Hewitt, chief executive of Jackson Hewitt Tax Service in Virginia Beach, Va.
One of the tax breaks most commonly passed up is the earned income tax credit, which can pay qualifying families up to $2,020 even if they didn’t pay any federal tax. If you earn less than $21,250 and have a child under the age of 18 who lived with you for at least six months of the year, you probably qualify.
To claim this credit, you must fill out the EIC form in addition to your basic 1040 or 1040A. If you have trouble with the forms, contact the IRS at 1-800-TAX-1040 and it will direct you to a nearby Volunteer Income Tax Assistance program. VITA counselors can help you get the credit and complete your 1040. These programs are available nationwide.
* If you simply cannot file your tax return accurately and on time, request an extension by filing a form 4868. That gives you until August 15 to file. It does not extend the time you have to pay the tax. In other words, if you owe tax, you must still send in what you think you owe before April 15 to avoid penalties. But you can delay sending the return and completed schedules for another four months.
