If your eyes are straining from rolling too much, we suggest you simply bookmark this page for the final seconds prior to your sending off for your return. Why?

The IRS charges 6% interest and up to a 20% penalty for incorrect filings. A double-check can save you tons of time, and possibly, tons of money.

• Did you include your W-2?

Obviously this won’t be a problem for e-filings, but for our snailmail brothers and sisters, it’s one of the most-repeated mistakes.



• Did you write the correct social security number?

Go over your return and see if you didn’t forget a digit, or mix your wife’s with your own. It’s a silly mistake that can cost you time or money (or both), and the IRS says it’s the number-one “whoops” mistake.

• Did you file under the correct status?

Easy to slip up on this one if you’re recently married or separated. Same level of “whoops” in the IRS mistake list.

• Did you claim new home credits too early?

You must have closed escrow by January 1, 2010. Anything after that has to wait for next year. Sorry.

• Did you report all your income?

No problem for anyone who’s worked at the same job for umpteen years, but if you’ve been floating about doing work for multiple employers (or, gulp, a now-defunct business), it can be tough to keep track of all the W-2s you’re owed.

• Did you report all your charitable giving?

If you’re just starting now, it’s a little late, but make sure you keep receipts for anything and everything you give away to charitable organizations. Anything valued over $200 has to have a corresponding receipt. If the IRS comes-a-auditing, be prepared to whip out your receipt logs, or you’ll have an uncomfortable amount of ‘splainin’ to do.

• Did you report all your mileage?

Same as your charitable giving, above. Make sure you keep an immaculate log. Again, the IRS expects you to keep your records for at least five years, and they’ll expect you to have those records ready for display whenever they’d like a closer look.

• Are you sure your “dependent” is actually a dependent?

Visit the IRS’s website and make darn sure your hanger-on qualifies as a dependent.

If this list saves just one person a week’s worth of waiting for a much-needed return, then our post will have been worth the effort!

The Schedule M form is for anyone needing to account for the Making Work Pay credit or retirees who got the free $250 from the government last year. The Making Work Pay credit comes from the February 2009 stimulus package, which stated that working taxpayers can get up to a $400 benefit.

This benefit was automatically adjusted in the witholdings of most Americans’ paychecks; your “benefit” should’ve resulted in a slight increase in your take-home pay. If you’re a self-employed employee, however, you likely didn’t see a dime of it. You’ll need to file a schedule M, and there’ve been more than a few mistakes.

Apparently, lines 10 and 11 are tripping up filers. Seems to be some confusion with the yes/no check box telling the IRS if you received the check, then the following line to put in the total amount received.

The solution is pretty simple:

• If you check “yes, I received a check,” then you must put in the amount received in the correct line.
• If you check “no, I didn’t receive the check,” then for goodness sakes, don’t put an amount in the line.

Both errors get your return shipped to the Error Resolution System, where it’ll languish waiting for someone to realize it was a simple mistake. This can add weeks to your return. Double-check your return and consider using an electronic filing system, as those flag errors in your filing. A misplaced checkmark or an extra “0” where there shouldn’t be can mean the difference between a prompt, juicy tax check and hours on the phone with an IRS representative. Ouch.

Question? Call the IRS toll-free at 1-800-772-1213.

• Complaints about tax preparers were up 80% in five years. This includes complaints for things like late filing, missing W-2s, base inaccuracies, or completely missing or lost filings. The solution is to get help with your filing from a service like RapidTax. You get 24-hour help if you’ve any questions, and you know for a fact that it was sent in on time.
• On average, “tax preparers” at tax return offices make more mistakes, and costlier ones, than the average taxpayer. The IRS says that 56% of professionally prepared returns had “significant errors” compared to 47% of those filed by the taxpayer. Think about it: these tax organizations like H&R Block have to hire gobs of seasonal employees. The person doing your return likely has no idea who you are, and therefore, no real obligation to make sure he gets it right. He’s there to slip under the radar, take a long lunch, and cash a paycheck, not double-check your above the line deductions.
• Any jerk off the street can call himself a “tax preparer.” And the scary thing is, he’d be right; unless you’re ponying up for a CPA, there’s no universal standard for qualification. In fact, only Oregon and California have any kind of system in place to determine whether or not the person filing your taxes is a complete fraud. There’s no way to know if the person you’re shelling out cash for is any more qualified than you are to file your return.
• It’s possibly too late to get the attention of a legitimate tax professional. Between February and April, “’you’re not going to get good service,’ says Frank Degan, and enrolled agent in Setauket, NY. ‘In the fall, tax preparers will give you their full attention.’” If you dive into the tax preparation waters now, you’ll likely end up in the kiddie pool with the unlicensed, uncaring, minimum-wage seasonal employees.
• Many accountants use tax preparation websites like RapidTax to file claims. No big deal if you simply don’t want to spend the hour or so to input numbers into fields. But if you’re expecting some kind of time-intensive numbers-crunching from your accountant, it’s quite possible he’s taking it easy, using a site like RapidTax. And he’s getting paid $50 an hour to do it.
• Outsourcing is a big business. Your accountant isn’t obligated to tell you if he hires someone halfway across the country to complete your return. In fact, he could take your (and your neighbors’) return and hand them off to the local tax preparation chain. The only thing he’s likely saving you is a trip to H&R Block.

SmartMoney has more info on the dangers of using a tax return office and how to avoid them.

What often happens is that you withhold some income for each state tax. For example, if you live in New York and work in New Jersey, you’ll see New Jersey and New York taxes taken out of your paycheck. You’re not being double-taxed, though: when you file, you’ll be able to file as a New York resident and a New Jersey nonresident. Then, on your New York return you can claim the taxes you paid to New Jersey.

If it sounds complex, there’s a reason for that: it is. For this to work, every state needs to make agreements with every other state covering the income they could both theoretically tax. These agreements are structured to generate a minimum amount of paperwork and special cases: instead of having some workers who lives in a state but doesn’t pay taxes, the states have someone who lives in the state and pays taxes like everyone else — but gets a special tax credit at the end of the year.

In a situation like this, it’s often best to talk to your payroll department about how to proceed. In places with many out-of-state commuters (like New York, New Jersey, and Connecticutt, as well as cities near state borders), they will have the details on how each state treats out-of-state income.