Finishing up Your Tax Return

Saturday April 12, 2008

I spoke to a friend tonight who wanted me to look over his tax return to see if there were any deductions he was missing out on. We went through the software she was using and everything looked great until it came to the capital gains section. And there we noticed the mistake: she had input a stock that she sold in 2008 on her '07 return. So now instead of owing the IRS, she's getting a refund.

This simply highlights the age-old lesson how two heads are better than one. So often in a rush to get our taxes filed, we can overlook little things. And it's the little things that can impact the tax calculations. So it might be time to take a break, step back, and approach the tax return with a fresh perspective. Here's some things you should check before filing your return:

Check your filing status. We've heard from lots of people in the message boards who are unsure about which filing status they qualify for. Some have even erroneously filed as single even though their divorce was not finalized. Double checking the rules can go a long way to making sure your return is as accurate as possible.

Check the names, SSNs, and birth dates of your dependents. Especially important is making sure you are eligible to claim your children, as many families run into problems over who exactly gets to claim the kids.

Double check the figures on your return against your W-2 and other documents. This is something I do all the time. I'll work on a return, then set it aside, and then come back and double check the data entry. This will help prevent any data entry errors.

Check your bank account information for direct deposit. This year the bank information will be doing double duty: once for your tax refund and again in the summer for the economic stimulus payments. Making sure these numbers are correct will eliminate the administrative hassle of tracking down a lost refund.

More tips for reviewing your return: