17 | October 2017

Avoid Common Mistakes During Tax Season

March 16, 2011

A Message from Betty T. Yee, First District Member, State Board of Equalization

April 15th --- a day taxpayers dread each year because that is when their income tax returns are due to the Internal Revenue Service (IRS) and Franchise Tax Board (FTB). Taxpayers fear they will make errors, causing them to lose deductions to which they may be entitled or find out in an audit they owe more tax plus interest and possibly penalties.

Here is how you can avoid common mistakes made in filing income tax returns.

  • File electronically. If you choose to e-file, many common errors are avoided or corrected by the computer software. For information about the Free File program for your federal return, visit the IRS website at www.irs.gov. For information about the CalFile or the ReadyReturn programs for your state return, visit www.ftb.ca.gov.
  • Include Social Security numbers for yourself and any dependents. Make certain your Social Security number(s) appears correctly and legibly on each page or schedule of your return, so if any pages or schedules are separated from your return, they can be re-attached.

    For any dependents you claim, include their Social Security numbers on your federal and California returns. If your dependent does not have a Social Security number, you can obtain one by following the instructions at www.socialsecurity.gov.
  • Earned Income Tax Credit. The Earned Income Tax Credit or the EITC is a refundable federal income tax credit for low to moderate-income working individuals and families. To see if you qualify for this credit, use the EITC Assistant at www.irs.gov.
  • Estimate tax payments. Make sure your claimed estimated tax payments match the IRS and FTB records. FTB's "My FTB Account" service allows taxpayers to view their estimated tax payments, California wage and withholding information, and other useful information online. This service is available at www.ftb.ca.gov.
  • Check your 2009 returns. If you claimed state income taxes as an itemized deduction in 2009, you may have to report some or all of your state income tax refund received in 2010. Otherwise, do not include the refund in your 2010 taxable income.
  • Check you math and itemized deductions. Make certain there are no addition and subtraction errors and all numbers have been accurately transferred from one schedule to another. Confirm the accuracy of your itemized deductions, including state and local income or sale taxes, paid real estate taxes, mortgage interest and points paid, and tax paid on new motor vehicles.
  • Use the correct tax rate schedule or column in the tax tables to figure your tax. Reporting the amount of tax incorrectly could delay your refund or result in penalties and interest if you underpay your taxes.
  • Use tax. You may owe use tax on purchases you made from out-of-state or Internet sellers. Use tax is similar to the sales tax paid on purchases you make in California. You may report use tax on your income tax return instead of filing a use tax return with the State Board of Equalization.
  • Tax refund. Make sure the financial institution routing and account numbers you have entered on the return for direct deposit of your refund are accurate. Incorrect numbers can cause your refund to be delayed or deposited into the wrong account.
  • Tax payment. Both the IRS and FTB have a number of e-payment options. For information on the IRS' e services go to www.irs.gov and select e-file. For information on the FTB's services and www.ftb.ca.gov and select payment options. If sending a check or money order make the check payable to "United States Treasury" for the federal income tax payment and to the Franchise Tax Board for your California income tax payment.
  • Attach all W-2 forms to your return. Attach the copy marked "to be filed with federal tax return" to your federal Form 1040 and the copy marked "to be filed with state tax return" to 540 California return. If you received a form 1099-R showing tax withheld, be sure to attach that one as well. If you believe the W-2s or 1099s contain mistakes, be sure to contact the sender to have the mistakes corrected.
  • Sign and date your returns. Be sure to sign and date your returns and include your occupation.

File Your Return on Time. File your federal and California returns by April 18, 2011. If you need an extension, you should file IRS Form 4868 at this time, and you will automatically have until October 15th to file both your federal and California returns.

If you file for an extension, any income tax you owe must still be paid on or before April 18th. For more information refer to the IRS's website www.irs.gov or FTB's website www.ftb.ca.gov.

Help for People Who Owe Taxes. With many people facing financial difficulties, the IRS and FTB may be able to help people who owe back taxes.

If you are behind on your federal tax payments and need assistance, go the IRS's website www.irs.gov and type in payment plans at the search key. You may also call the number listed on any recently received IRS correspondence.

If you owe California back income taxes and cannot pay, you may request to make monthly installment payments. Go the FTB's website www.ftb.ca.gov and select payment options for more information.

Records You Should Keep After Filing Your Returns

You should keep copies of your tax returns for at least four years, along with substantiation of any credits and deductions claimed and copies of W-2 and similar forms.

Help Is Available

There are many free resources on the IRS and FTB websites that can assist you with your filing requirements. In addition, the IRS and the FTB have Taxpayer Assistance programs where you can obtain in-person help:

  • Visit www.irs.gov or look in the phone book under "United States Government, Internal Revenue Service" for a listing of Taxpayer Assistance Centers.
  • Visit www.ftb.ca.gov for a listing of approximately 1,800 California locations where trained volunteers provide free help during tax filing season. You can also contact the FTB toll-free at 1-800-852-5711 to find a location near you.

Betty T. Yee represents the First Equalization District which is comprised of 21 counties in northern and central California. The Board hears and decides income, business, and special tax appeals matters.

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