Tax Prep & Planning

Avoid These Common Extension Filing Errors

Did you file a tax extension this filing season? If so, individuals have until October 15, 2019 to submit their tax return. (Most businesses have until September 15.)

If you filed an extension and don’t file your tax return on or before the extended due date, you could be subject to a penalty. If you owe tax with the return, the failure-to-file penalty is 5% of the unpaid taxes for each month or part of a month that the tax return is late. The late filing penalty maxes out at 25%.

Important: An extension of time to file a tax return is not an extension to pay taxes! When you filed your extension, you should have paid at least 90% of any balance due at that time. If not, a failure-to-pay penalty of 0.5% per month applies. Even if you don’t plan to file your tax return until October 15, you should estimate what you owe and pay it as soon as you can in order to reduce late payment penalties since the penalties are charged on a monthly basis.  

In addition to paying your balance due as soon as possible and filing by the extended due date, it’s important to file an accurate tax return. If you make an error, it could result in a longer processing time or a refund delay. Avoid these common errors as you prepare to file your tax return, according to the IRS:

  1. Missing or inaccurate Social Security numbers. Enter your, your spouse’s and your dependent’s SSN on a tax return exactly as printed on a Social Security card.
  2. Misspelled names. Double check to ensure you spelled all names listed on a tax return exactly as listed on a Social Security cards.
  3. Filing status. Are you filing using the right status? You have a few options, so make sure to consult the IRS’ Interactive Tax Assistant on IRS.gov to help choose the correct status.
  4. Math mistakes. Math errors are common, ranging from simple addition and subtraction to more complex items. Figuring the taxable portion of a pension, IRA distribution or Social Security benefits is more difficult and results in more errors. Taxpayers should always double check their math. Better yet, tax preparation software does it automatically.
  5. Figuring credits or deductions. Have you claimed every tax deduction and credit you are entitled to? Consulting an experienced tax professional can help you determine if you are eligible for tax credits or deductions.
  6. Incorrect bank account numbers. If you are due a refund, you can choose direct deposit for ease and convenience. But make sure you double-check your bank routing and account numbers on your return! If you have a balance due and are paying by direct debit you must also make sure you’ve entered the correct routing and account numbers.
  7. Unsigned forms. As simple as it sounds, many taxpayers fail to sign a paper return. And if you forget to do this, your return isn’t valid. Both spouses must sign a joint return. If you’re filing electronically, your tax software will take you through the digital signing process.
  8. Filing with an expired ITIN. The IRS will process and treat as timely a return filed with an expired Individual Tax Identification Number, but won’t allow any exemptions or credits. Taxpayers will receive a notice explaining that an ITIN must be current before the IRS will pay a refund. Once the taxpayer renews the ITIN, the IRS will process exemptions and credits and pay an allowed refund. ITIN expiration and renewal information is available on IRS.gov.

Work with an expert tax advisor who can get your tax documents organized to help expedite the process of filing your tax return on or before Oct. 15.

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