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7 things to check before you file your tax return

Be sure to verify everything your tax preparer filled in on the forms, because you'll be held responsible. You also want to double-check names and numbers.

By MSN Money Partner Mar 26, 2013 12:31PM

This post is by Eva Rosenberg at MarketWatch.com.

 

© Best View Stock, Best View Stock, Getty ImagesDid you find a tax pro who swears she can get you better refunds than anyone else in the world? Do all her clients get great refunds, and you can’t figure out why you and your accountant can’t get the same result? Is she smarter than everyone?

 

There might be another reason she can do this. She may be committing tax fraud. But what happens when your tax preparer commits tax fraud? You get into trouble.

 

Consider the case of someone who is being audited because her tax preparer took deductions for business expenses. She can’t provide receipts for those expenses because she doesn’t have a business -- or any such expenses. She is rightfully nervous. By the time the IRS gets done with her, she will owe the taxes on those fraudulent expenses, several types of penalties and interest on the whole shebang.

 

The first thing you need to know about any tax return you sign are these words that appear over your signature:

 

"Under penalties of perjury, I declare that I have examined this return and accompanying schedules and statements, and to the best of my knowledge and belief, they are true, correct, and complete. Declaration of preparer (other than taxpayer) is based on all information of which preparer has any knowledge."

 

Read your entire tax return. Don’t put up mental walls and blinders. You are responsible for what goes into those pages. When you see something that you don’t understand, ask. If your tax preparer refuses to provide answers, or to let you see your tax return before it is e-filed, take your papers and records, and leave.

Double-checking these seven items will help you prepare your own tax return properly or to catch your preparer’s errors or fraud.

 

Names

All names should match the Social Security cards, where the IRS cross-references all names. One client told us we had spelled his first name "Jeffrey" incorrectly. We had used the spelling on his Social Security card, which was "Jeffery." When he looked closely, he saw that his Social Security account had been set up with the wrong name from day one.

 

Did you get married without changing your name with the Social Security Administration? Use your single name.

 

Check the name appearing on all 1098 and 1099 forms. If you have a living trust, make sure you transferred all your assets to that trust. You will know if the forms don’t show the trust’s name.

 

ID numbers

Verify each person’s Social Security number by looking at the SS card. Don’t use your memory. When we first started looking at SS cards, one child’s number turned out to be half hers and half her father’s.

 

Verify taxpayer ID numbers used on any business schedules, including Schedule C, K-1s and so on.

 

Make sure taxpayer ID numbers on Forms 1098 and 1099 are correct. People in business often forget to give their customers or clients their business ID number. So the 1099s get issued to the wrong entity. What should you do when that happens? Get a tax pro to help you report it correctly. Update the number with your clients and vendors by giving them a new Form W-9.

 

Form 1040

Look over the bottom area of page 1 of your Form 1040. Are there any numbers you don’t understand? Is there a deduction for an IRA or retirement plan contribution that you know you didn’t make? Or did you want to make a contribution? This step will help you remember to fund that plan before April 15.

 

Unless you’re paying alimony (and relatively few people do), there should be no amount showing for it. If you are paying alimony, the ex-spouse’s Social Security number must appear next to the alimony amount. The IRS computer will be looking at his or her tax return for the corresponding income amount. If it’s not there, both parties will face IRS scrutiny.

 

When you have education costs, they appear either in this area as a tuition and fees deduction or on the next page as education credits. If they don’t show up in either place, ask why not. The software often requires extra steps to make these expenditures appear on the tax return. This could get overlooked.

 

Deductions

Folks who were age 65 or over as of Dec. 31, 2012, and those who are blind should be sure those boxes are checked. Checking those boxes increases your standard deductions. If you don’t own a home or have very high medical or business expenses and contributions, you probably don’t need to itemize.

 

If line 40 of your tax return shows an amount higher than the standard deduction, you’ll want to look at Schedule A. A common ploy is to enter numbers as mortgage interest and contributions when you didn’t really spend money on either expense. The fraudsters use the national averages the IRS publishes each year to make up amounts on your behalf.

 

Credits

Common areas of abuse are excess child tax credits, earned income credits and education credits. Those are called refundable credits. In other words, the IRS gives you back money even if you paid nothing in.

 

Fraudsters often phony up information to get you these refunds -- even when you don’t have qualifying children. If these credits show up, make sure you’re entitled to them. And even when you are, having them on your tax return will slow down your refund.

 

Withholding

Make sure this shows the correct amount. A common error (of tax pros and amateurs alike) is to enter the Social Security withheld into this field. Also, if you had more than one job during the year and earned more than the Social Security contribution limit, make sure the computer picked up your excess Social Security withheld.

 

Refunds

When using the direct-deposit feature, don’t just double check the routing number and account number. Triple check it. Make absolutely certain it is your account and that the account is open. If you use the wrong number and someone else gets your refund, the IRS cannot help you. You will have to sue that person to get your money back, unless they voluntarily hand over your refund. That doesn’t always happen.

 

You would think that by using a tax professional, you’d have no worries. But, ultimately, you are still responsible for everything on your tax return.

 

More from MarketWatch.com and MSN Money:

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39Comments
Apr 12, 2013 9:42AM
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Just save a lot of time money and frustration.

 

Get rid of todays tax laws and charge a flat rate for all. Stop giving deductions of every kind.

 

Take out of our pay and never have to expect or receive a refund...

 

Jerry

 

 

Apr 12, 2013 9:34AM
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The great part is getting a notice 3 years after filing that they dont agree with a deduction and want the difference plus interest for their delay of 3 years!!
The fading "middle class" always get the dirty end of the stick!!

Apr 12, 2013 4:09AM
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I know...   it sucks.  But you should always file a tax return.  You don't want the IRS coming after you just because you didn't file a return you would've gotten a refund from.  
Apr 12, 2013 11:32AM
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Why should America have a central bank issuing worthless paper money that controls our lives and that of the yet to born citizens ?

This private international banking cartel was unconstitutionally granted this power by a devious, scheming group of senators back in 1913. In essence what they did was place the American people into indentured servitude by forcing The People to pay usury on worthless fiat currency (paper money created out of nothing), not to fund the government, but to enrich the bankers and fund wars in which America should never be involved. This system exists not to fund the government, but to allow the U.S. Congress the carte blanche power to continue funding unconstitutional agencies and programs by providing them with a bottomless source of worthless ink.

The Federal Reserve Bank should be abolished as it is nothing more than a cancer that is destroying this country that is run for the benefit of the international banking mafia only.

Apr 12, 2013 12:41PM
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I filed my taxes with a tax office the end of February, same as I have done for the past few years. When the office attempted to electronically file for me, they received a message that the social security number had been used already. I notified the IRS Fraud Dept. Essentially they told me that it would take them 6 months to correct the matter, even though the person I spoke to could see "who" had filed under my social security number. They can see who used my number right away and it will take them 6 months to get it cleared up? Of course, you can probably guess I am due a refund. By the time they clear it up, it will be almost time to file again. I'm wondering if I can charge them interest after April 15th?
Apr 12, 2013 9:53AM
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What the IRS does not tell you and currently the law is, if you file on or before 15 April and will receive a refund, the IRS is responsible for getting it to you prior to 1 July. If they are delayed (overworked, poor babies) then you can charge them the same late interest that they would charge you, if you were delinquent. Oh, if that's the case with you and you do push that issue, ensure your tax returns for the past 10 years are spotless - you will get audited.
Apr 12, 2013 8:11AM
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This year you need to check you patience since your refund may be delayed. It's been over a month now, and I am still waiting.

Apr 12, 2013 11:31AM
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What about the 47%'ers who reap the benefits of clean food, water, medications, safe roads and enjoy the protection of their existence because of capable armed forces that pay absolutely NOTHING ...

Why aren't they required to ante something into the community pot and PAY THEIR FAIR SHARE?

Apr 12, 2013 9:33AM
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Without the "Federal" Reserve Bank siphoning off the wealth of our nation, there would be no need for a personal income tax.
Apr 12, 2013 12:24PM
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I prepare my own tax return using H&R Bock at Home software. Last year I found a programming error that caused me to visited their local office and alert them to it. Little interest was shown because they use different software than the Home Version. This year I discovered the error was still there. The error is, that the NJ Property Tax Reimbursement is taxed federally as Other Income. The aforementioned proper name is revised by the software to "Recoveries." When I do the NJ Income Tax return, the federal information is copied into the state return including the Recoveries as Other Income. However, NJ exempts the NJ Property Tax Reimbursement from taxation. I needed to access appropriate NJ form and delete the amount to avoid increasing my taxable income. Moral of my story: Do not trust H&R Block. Know your state's law for exemptions.
Apr 12, 2013 9:47AM
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Taxation or Incarceration you choose!
Apr 12, 2013 9:41AM
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I love TURBO TAX it walked me through all the forms I had to fill out for my small business.

 

Apr 12, 2013 12:28PM
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One of the biggest tax preparation company claims they can get you the biggest tax refund! Hmmm...could they be filing fraudulent returns?? They even have commercials saying that! And the prices they charge their clients are robbery!!!
Apr 12, 2013 2:30PM
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It would be great if these companies were honest to people. I know a few people who believe in these companies and go with the ones who get them the most $$$. I've tried explaining how it works but they don't seem to listen and what sucks is that these people are illegal so theyy get numbers issued or some sort and claim children from out this country and then they rub in my face how much more $$$ they received than me! I just smile and say, "Well guess what?! I won't be running from the government or spend my life in Jail for fraud! so enjoy!"
Apr 12, 2013 11:47AM
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I have worked for the world's largest tax preparation company in the world for 19 years.  I see advertisements for other tax preparation companies and their claims.  I do many amendments for people who make mistakes using these other company's software.  My big question is, their adverts say they have all of these tax experts to answer questions why do these people come to us to have their questions answered and for us to do their amendments.  I did 3 amendments for a person the other day who had prepared his last 3 years on one of the "do it yourself" tax programs and got him nearly $2,000 more refund from items he had missed.  If these other programs are so good, how can this happen?
Apr 15, 2013 12:01PM
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First thing to check - (1) do you have any money in your bank account after paying your taxes?  If the answer is "yes" - you haven't calculated your taxes correctly.
Apr 12, 2013 6:44AM
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When you have education costs, they appear either in this area as a tuition and fees deduction or on the next page as education credits. If they don’t show up in either place, ask why not. The software often requires extra steps to make these expenditures appear on the tax return. This could get overlooked.


My tax person that prepared my taxes, said I could not claim since I received more financial aid than the cost on the 1098T, is this correct?

 

Apr 15, 2013 12:36PM
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How much did you make last year X 10% = your taxes.  Very simple, but too simple for Congress to understand
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8th thing to check, make sure your taxprepayer can add.  I have had our income and withholdings added together wrong on more than one occasion on our joint return.  Duh!!!
Apr 12, 2013 11:05AM
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The most important thing I do is to make sure my accountant has all my papers.  It's too much trouble doing it on my own.
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