Wednesday, February 28, 2007

How to Spot a Tax Return Mistake

You must be aware that whoever prepares your tax return, ultimately you are responsible for its contents.  The worst case scenario, if you use a “crooked” tax preparer, is jail time followed by severe financial penalties.  For most of us, though, a mistake on your return means either you owe more, or your refund will be delayed, perhaps indefinitely.  ’Got your attention now? Below are the most common errors committed on tax returns and how to avoid them: 

• It should be the mantra for everyone who prepares or has their tax return prepared- FIRST AND FOREMOST: CHECK THE MATH.  That’s right.  Simple errors in addition and subtraction account for most tax return errors.

• Double-check and then check your return again to ensure that your Social Security number is correct.

• Many of us work two or more jobs.  Check to make certain that your 1099 and W-2s are correct.  If not, have them corrected as soon as possible in order to avoid the IRS receiving conflicting information- a red flag for sure!

• Include your Social Security number on each and every page so that if the IRS deconstructs your return, that it can easily be reassembled.

• If you submit your return by mail, ensure that your Social Security number is on your SIGNED check along with the form number and tax year on the front of the check.

• While on the subject of signage, be sure to sign your return, include your occupation and, if filing jointly, ensure that your spouse includes their information as well.

• Keep copies of all documents sent to the IRS.  Be sure send your return by certified mail with return receipt.

Posted by Blog Admin in • Forensic Accounting
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