Tax refunds are anxiety generators in the USA. Regardless of your financial situation, you want it to arrive as soon as possible. On the other hand, many people feel puzzled because they have no idea how to file them properly. Even if you are certain you are getting a refund, you end up putting it off. It would not be wise though.
By doing so, you delay getting more money to make retirement contributions. Or else, you could make some investments. Making a mistake once you have filed your tax return could result in a longer waiting time. Whether it is a typing mistake or a math error, it is something you should avoid at all costs. Forget about your fears of filing and get it correctly.
How many math errors have there been in American tax returns?
According to the Internal Revenue Service or IRS data, there were 9 million math errors to correct through July 15, 2021. It is true that many taxpayers made some errors regarding their tax credits. The Recovery Rebate Credits maths were also to blame in the 2020 tax season. Of course, as soon as the IRS comes across a math error they inform you.
However, if they have to inform 9 million taxpayers, it means a lot of time. That implies delays in dealing with your tax refund, but also in other people’s. These math problems might also affect the amount of your refund check. The Recovery Rebate Credit is at the top of the most common errors. If you still have to file for 20200 or 2021, be careful with that.
What is the second most common mistake regarding taxes?
Tax calculation is among the most frequent ones. Apparently, many taxpayers find it difficult to get it right. Even if you work it out correctly, you may type the wrong figures. After that, more often than not people make mistakes about their adjusted gross or taxable income. Providing the IRS with the wrong amount is what you should also avoid.
Just like with the Recovery Rebate Credit, taxpayers also get it wrong when it comes to the Child Tax Credit figures. Not all families, individuals, or married couples filing jointly have children. That might be the reason why they come fifth and not higher on the list. The following ones are not that frequent, but they still are the cause of errors for many American taxpayers.
Itemized or standard deductions
The IRS has also detected some math errors regarding itemized or standard deductions. Even those who are students and work also make mistakes. Mostly, they have to do with their education credits. So far, there are two education credits available in the USA. It could be the American opportunity tax credit or the lifetime learning credit.
Close to this group, the IRS also spots some errors when first-time homebuyers enjoy credit repayment. Once more, they are not many people if we take into account all the millions of tax returns. However, the list of possible errors and mistakes goes on. Believe it or not, many people also make mistakes when it comes to their filing status. Obviously, taxpayers also get their refund amounts wrong. Not surprisingly, the money they owe in taxes as well. Double-checking can reduce these mistakes.