Slideshows

IRS's Top 10 Tax Mistakes of 2012

The Internal Revenue Service's list of the most common errors it sees from taxpayers and paid preparers on tax returns is a sobering reminder that nobody is perfect. Here's what the IRS had to do to fix the most prevalent mistakes.

1. Social Security Benefits 1. Social Security Benefits

The IRS needed to change the amount of taxable Social Security benefits because there was an error in the taxable amount.


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2. Capital Gains Tax Rates on Dividends 2. Capital Gains Tax Rates on Dividends

The IRS had to change the amount of tax because the tax rates on qualified dividends and capital gains are generally lower than the standard rates.


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3. Tax Mismatch 3. Tax Mismatch

The amount of tax entered was incorrect based on the taxable income and filing status.


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4. Computation Error 4. Computation Error

The IRS needed to change the amount of total income because there was an error in the computation.


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5. Self-Employed 5. Self-Employed

The IRS needed to change the adjusted gross income section because the entry for one half of self-employment tax was missing or incorrect.

6. Wrong Age to Claim the EITC 6. Wrong Age to Claim the EITC

The IRS didn't allow the amount claimed as Earned Income Tax Credit because the taxpayer or spouse must be at least 25, but less than 65 years old, on December 31st of the tax year for which the tax return is being filed.


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7. Incorrect Amount on Business Income or Loss 7. Incorrect Amount on Business Income or Loss

The IRS had to change the amount of business income or loss because there was an error on Schedule C/C-EZ.


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8. Repayment Installment for First-Time Homebuyer Credit 8. Repayment Installment for First-Time Homebuyer Credit

The IRS has needed to calculate the amount of the repayment installment for the First-Time Homebuyer Credit that is due and added it to the total tax.


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9. Health Savings Account Deduction 9. Health Savings Account Deduction

The IRS had to change the amount of the health savings account deduction because there was an error on Form 8889.


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10. Too Many Dependents 10. Too Many Dependents

The IRS didn't allow one or more of the claimed exemptions because for one or more dependents, the SSN or ITIN was missing.


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Also see:

Top Tax Strategies for 2012

10 Things Advisors Need To Know About Charitable Giving

The Art of Conversation: 8 Tips for Successful Advisors

9 Ways to Keep Clients From Overspending in Retirement

The Internal Revenue Service's list of the most common errors it sees from taxpayers and paid preparers on tax returns is a sobering reminder that nobody is perfect. Here's what the IRS had to do to fix the most prevalent mistakes.

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