Key Highlights
- Nine common tax filing mistakes that can delay your refund by 21 days or more.
- The Internal Revenue Service (IRS) is reviewing files more closely to catch errors and ensure accurate refunds.
- Taxpayers should review their returns for accuracy and be aware of potential delays.
Refunds Delayed: The Nine Mistakes You Need to Avoid
The excitement of tax season can quickly turn sour when you realize your refund is stuck, delayed by weeks. According to Clever Dude Brandon Marcus, there are nine common mistakes that can delay your refund. Let’s break them down and see how to avoid these pitfalls.
Mistake #1: Filing an Incorrect W-2 or 1099 Form
One of the most critical pieces in tax filing is getting those W-2s and 1099 forms right. If you report incorrect income, it can mess up your entire return. So double-check all your documents before submitting.
Mistake #2: Omitting Income from Self-Employment
Self-employed individuals often miss reporting their income on tax returns. This oversight can lead to significant delays as the IRS investigates and verifies your claims. Keep meticulous records of all earnings, no matter how small.
Mistake #3: Forgetting About Foreign Income
If you earned money abroad, make sure to report it properly. The IRS is getting better at catching unreported foreign income, so don’t risk a delay by forgetting this crucial detail.
Mistake #4: Incorrectly Claiming Dependent Exemptions
Claiming dependents who do not meet the eligibility criteria can lead to serious delays. Ensure all your dependents qualify based on age and relationship status before claiming them.
Mistake #5: Failing to Adjust for Capital Gains or Losses
If you sold stocks or real estate, make sure to adjust your tax accordingly. Missing out on capital gains or losses can throw off your overall return and cause delays in processing.
Mistake #6: Not Reporting Rental Income Correctly
Rental income is another area where mistakes are common. Failing to report it accurately can lead to a lengthy review by the IRS, causing unnecessary delays. Keep detailed records of all rental income and expenses.
Mistake #7: Incorrectly Claiming Business Expenses
Business owners often overclaim or underclaim deductions for their home office or business supplies. Make sure your claims are reasonable and supported by documentation to avoid delays.
Mistake #8: Forgetting About Education Credits
While claiming education credits can be beneficial, failing to do so correctly can cause issues. Double-check that you qualify for the American Opportunity Tax Credit or Lifetime Learning Credit before filing.
Mistake #9: Overlooking State and Local Taxes
If you owe state or local taxes but fail to account for them in your federal return, this omission can delay your refund. Always ensure all tax obligations are accurately reported to avoid delays.
You might think this is new, but the IRS has been beefing up its review processes for years now. They’re not just looking for errors; they’re actively seeking ways to catch fraud and ensure fair refunds for everyone. So take your time, double-check everything, and stay aware of these common mistakes to avoid a refund delay.
And remember, if you’re unsure about anything on your return, it’s always better to consult with a tax professional or use a reputable tax software that can help guide you through the process.
