APPENDIX C
Common Mistakes to Avoid

The IRS doesn't give you deductions and credits automatically; you have to claim them. It doesn't send you a refund of a tax overpayment; you have to submit a claim for it. And you may be missing out on tax‐saving opportunities. All of these errors are mistakes that can be avoided. The IRS has a list of some common errors that can delay the processing of your return, resulting in having to wait for a refund or even triggering an audit of your return.

  • Mistake: Not filing electronically. Filing electronically ensures your return is processed as quickly as possible, which is important if you are expecting a tax refund. Filing electronically also avoids math errors. You can file electronically with your computer, smartphone, or tablet, or use a tax return preparer who can e‐file for you.
  • Mistake: Not using the correct filing status. You could miss out on tax‐saving opportunities. Fortunately, tax software, including IRS Free File, also helps prevent this mistake when selecting a tax return filing status. If you are unsure about your filing status, the Interactive Tax Assistant on IRS.gov can help you choose the correct status, especially if more than one filing status applies.
  • Mistake: Failing to answer the virtual currency question. The processing of your return will be delayed while the IRS sends you a letter asking for a response. If you received, sold, exchanged, or otherwise disposed of any financial interest in any virtual currency in the year, you must answer “yes” on page one of your return. If you didn't do any of these things, answer “no.” Don't leave it blank.
  • Mistake: Failing to report all taxable income. Underreporting income may lead to penalties and interest. Organized tax records help avoid errors that lead to processing delays and may also help to find overlooked deductions or credits. Have all your income documents—W‐2s, 1099s, K‐1s—on hand before starting your tax return.
  • Mistake: Omitting unemployment compensation. This income is taxable now even though there had been a partial exclusion in 2020.
  • Mistake: Failing to verify the name, birth date, and Social Security number entries of dependents. Dependents affect filing status as well as eligibility for various deductions and tax credits. If you don't enter them correctly, you may lose out, so correctly list the name, Social Security number (SSN), and date of birth for each person claimed as a dependent on your return. Enter each SSN and individual's name on a tax return exactly as printed on the Social Security card. If a dependent or spouse doesn't have and is not eligible to get a SSN, list the Individual Tax Identification Number (ITIN).
  • Mistake: Failing to attach Form 8962 for the premium tax credit. If you received assistance with paying health insurance premiums for coverage obtained through the government marketplace, you must attach Form 8962. If you file electronically, your form won't be accepted for processing without it.
  • Mistake: Having incorrect check routing and account numbers. If you want a tax refund to be directly deposited into a designated account, a wrong number will misdirect your refund. Double check that the financial institution routing and account numbers entered on the return are accurate.
  • Mistake: Mailing paper returns to the wrong address. Returns sent to the wrong IRS Service Center will delay processing (and the receipt of a tax refund where applicable). Paper filers should confirm the correct address for where to file on IRS.gov or on he form instructions, to avoid processing delays.
  • Mistake: Not signing and dating the return. Again, returns that aren't signed and dated won't be processed; the returns aren't complete. If filing a joint return, both spouses must sign and date the return. E‐filers can sign using a self‐selected personal identification number (PIN).
  • Mistake: Not keeping a copy of the return. When ready to file, make a copy of your signed return and all schedules for your records. Yes, you can obtain copies later on from the IRS, but why go through this hassle? You need copies to help you prepare future returns and you may also use them for other purposes (e.g., obtaining a home mortgage).
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