7 Things to check for when filing taxes
By: Joel Rodgers
Updated: March 5, 2013
All names should match the Social Security cards, where the IRS cross-references all names. One client told us we had spelled his first name "Jeffrey" incorrectly. We had used the spelling on his Social Security card, which was "Jeffery". When he looked closely, he saw that his Social Security account had been set up with the wrong name from day one.
ID numbers-
Verify each person's Social Security Number by looking at the SS card. Don't use your memory. When we first started looking at SS cards, one child's number turned out to be half hers and half of her father's.
Form 1040-
Look over the bottom area of page 1 of your Form 1040. Are there any numbers
you don't understand? Is there a deduction for an IRA or retirement plan
contribution that you know you didn't make? Or did you want to make a
contribution? This step will help you remember to fund that plan before April
15.
Unless you're paying alimony (and relatively few people do), there should be no amount showing for it. If you are paying alimony, the ex-spouse's Social Security number must appear next to the alimony amount. The IRS computer will be looking at his or her tax return for the corresponding income amount. If it's not there, both parties will face IRS scrutiny.
When you have education costs, they appear either in this area as a tuition and fees deduction or on the next page as education credits. If they don't show up in either place, ask why not. The software often requires extra steps to make these expenditures appear on the tax return. This could get overlooked.
Deductions-
Folks who were age 65 or over on Dec. 31 and those who are blind should be
sure those boxes are checked. Checking those boxes increases your standard
deductions. If you don't own a home or have very high medical or business
expenses and contributions, you probably don't need to itemize. If line 40 of
your tax return shows an amount higher than the standard deduction, you'll want
to look at Schedule A. A common ploy is to enter numbers as mortgage interest
and contributions when you didn't really spend money on either expense. The
fraudsters use the national averages the IRS publishes each year to make up
amounts on your behalf.
Credits-
Common areas of abuse are excess Child Tax Credits, Earned Income Credits and
Education credits. Those are called refundable credits. In other words, the IRS
gives you back money even if you paid nothing in. Fraudsters often phony up
information to get you these refunds -- even when you don't have qualifying
children. If these credits show up, make sure you're entitled to them. And even
when you are, having them on your tax return will slow down your refund.
Withholding-
Make sure this shows the correct amount. A common error (of tax pros and
amateurs alike) is to enter the Social Security withheld into this field. Also,
if you had more than one job during the year and earned more than the Social
Security contribution limit, make sure the computer picked up your excess Social
Security withheld.
Refunds-
When using the direct deposit feature, don't just double check the routing
number and account number. Triple check it. Make absolutely certain it is your
account -- and that the account is open. If you use the wrong number and someone
else gets your refund, the IRS cannot help you. You will have to sue that person
to get your money back, unless they voluntarily hand over your refund. That
doesn't always happen.
You would think that by using a tax professional, you'd have no worries. But when you shop for the lowest price and highest refunds -- sometimes you get what you pay for.
