Key Mistakes to Avoid This Tax Season

Key Mistakes to Avoid This Tax Season

There are many simple mistakes that can significantly delay a tax refund.

 

For much of the ongoing coronavirus pandemic, the Internal Revenue Service (IRS) has voiced concerns that it is highly underbudgeted and understaffed.

Given these issues, the IRS is still trying to get through millions of tax returns from last year as well as new returns that are being filed daily.

 

According to the Congressional Budget Office, the IRS has roughly 20,000 fewer employees and 20 percent less funding than it did in 2010. This has undoubtedly hindered the beleaguered agency’s ability to get work done quickly and efficiently.

“We have taken extraordinary measures to work through unprocessed returns and correspondence, including mandatory overtime by IRS employees, creating and redirecting surge teams to address the inventories, temporarily suspending certain automated compliance notices and, where possible, modernizing operating systems to accelerate the manual processing of inventories,” IRS Commissioner Chuck Rettig wrote in a recent Yahoo News op-ed.

Still, it is important to keep in mind that there are other forces at play. The IRS recently stated that most taxpayers with error-free and electronically filed tax returns should expect to see their refunds within twenty-one of filing. Of course, there are always exceptions, and even the smallest mistake on a return will delay a taxpayer’s refund.

With this in mind, here are some mistakes taxpayers need to avoid if they want their refunds on a speedier timeline.

Returns With Errors

According to CNET, “when you file your tax return, it’s important to cross-check any information you’ve included to make sure it’s accurate.” Then before clicking to send off the return to the IRS, “simply take a second look to fix any potential errors and make sure you’ve filled out each field.” This is especially important if one reported the child tax credit or earned income credit on their taxes.

If there are problems eventually found on the return, the IRS will have to manually rectify them, which could add weeks or months of waiting for the refund.

Not Signing Your Return

Be aware that many Americans mistakenly send off their returns without signing them. “Sending in an unsigned paper return is like sending in no return at all. At that point, it’s not valid,” IRS spokesperson Eric Smith told the AARP. “We have to send it back to you for your signature. Then you have to send it back to us. So, unfortunately, it then becomes part of our paper backlog,” he continued.

Incorrect Banking Information

Make sure to take special care when entering direct deposit information on the return. CNET noted that “if you accidentally forget to update it with your new direct deposit details, your refund will be sent back to the IRS.”

This mistake means that a paper check will be sent off later, and that could take weeks or months to finally arrive.

Further Review

For those who get a CP07 Notice, it means that the agency is holding the refund until it completes a more thorough review.

“If the agency finds no issues, your refund could arrive within six to 12 weeks, assuming no taxes are owed,” CNET writes. “If the IRS does find issues with your return, it’ll send you a notice with instructions on what to do within that same period. That means you’ll get your refund months later than you anticipated.”

Ethen Kim Lieser is a Washington state-based Science and Tech Editor who has held posts at Google, The Korea Herald, Lincoln Journal Star, AsianWeek, and Arirang TV. Follow or contact him on LinkedIn.

Image: Reuters.