Common Errors By Taxpayers

Ever wonder what the most common mistakes are on returns?  Here’s five of IRS top picks. 

#1– Math Mistakes. 

Math errors top the IRS’s list of top taxpayer mistakes. Whether it is arithmetic errors or errors in transferring totals from one form to another, the IRS screening will find the mistake and issue a correction notice.

If the result is that the taxpayer owes more, then the IRS will send out a bill for that amount. If the result is instead that the taxpayer overpaid, then the overpaid amount will be refunded or credited to you as per your request. Arithmetic alone will seldom result in a full audit.

#2—Exemptions.

You cannot take a personal exemption if someone else can claim you as a dependent (whether they actually do so or not).

#3—Filing Status.

To use Head of Household status you need a dependent, or you need to be one of at least two people in your home, and you would have provided most of the support for the year. Those filing Married Filing Separately do not qualify for the Earned Income Credit.

#4 - Dividends & Interest.     

Usually you should receive statements listing these figures. Be sure to check your statements to make sure they are correct.

#5—Lost Receipts.

Whatever amounts you are claiming for deductions, you must have your receipts as proof of these costs. Keep your receipts or other documentation of expenses for at least seven years. The statute of limitations is seven years for the IRS to audit and/or disallow any deductions.

These articles are in intended to be general guidelines and information to the public.  Be sure to consult with your tax professional regarding your specific situation.