Filing an accurate tax return is one of the most critical business practices for tax preparers. Making an error on a client’s return will cause many issues, including the delay of their refund if they are entitled to one.
Rushing through tax returns during the busy season can result in simple mistakes that can cause major headaches for you and your clients. Therefore, taking your time and being detail-oriented while preparing tax returns is essential. Here is a list of ways to prevent common tax filing errors.
Wrong or missing Social Security numbers
Make sure you enter your client’s correct Social Security number. If they don’t have their number and their spouse or dependent’s numbers memorized, encourage them to bring their cards to your office so you can make sure to enter them correctly.
Wrong names
Verify that the spelling of your client’s name is correct. Their name should be entered exactly as it appears on their Social Security card. Ask to view their physical card to double-check and ensure accuracy.
Filing status errors
Take the necessary time to select the correct filing status for your client. Are they married? Are they divorced? Are they widowed? Do they run their household alone? All these factors affect their filing status.
Calculation mistakes
Carefully enter income and expense info into your tax software. Avoid rushing through entering your client’s information so your calculations will be correct.
TaxSlayer Pro software will do the calculations for you, so you don’t have to worry about making a mathematical error. But the calculations are only accurate if the data you enter on the return is correct.
Not including all forms of income
During your initial consultation with a client, it is crucial to ask relevant questions to identify all the types of income that they need to report. Ask whether they receive dividends, interest, business income, Social Security income, and any other monetary benefits.
Some clients may not be aware that their side hustle income is taxable, so make sure to clearly inform them about all the different forms of income that need to be reported. Request clients to provide you with all the forms they receive from their employers, including records for self-employment income.
Incorrect bank account numbers
Direct deposit is the fastest way to get a refund, according to the IRS. Make sure their routing numbers are correct because it can be difficult to track down a refund that is sent to the wrong account. You can encourage your clients to use direct deposit or help them to double-check their address if they would prefer to receive a check.
Unsigned forms
An unsigned tax return is not valid. Make sure your clients electronically sign their forms if they are not present at the time of filing. Joint returns must be signed by both spouses. This is especially important to double-check if your clients are in the process of separating or divorcing.
TaxSlayer Pro gives you the tools you need to capture digital signatures using the mobile app or the Premium software package.
Electronic filing PIN errors
A personal identification number is used to sign a return electronically. If your client doesn’t know their PIN, enter their adjusted gross income from their prior-year tax return instead.
Not encouraging your client to review their return
When you have finished preparing your client’s return, encourage them to review all the information in detail before signing it. This will help you avoid filing a return with a misspelled name or incorrect address and give your client peace of mind knowing they could review everything before you sent it to the IRS. TaxSlayer Pro helps you to communicate quickly and conveniently with your clients through the TaxesToGo® app.
