6 Mistakes That Will Delay Your Tax Refund

If you omit something important while filing electronically, your return will be rejected by the IRS, but it can usually be fixed faster. “Nobody likes to get rejected, but in this case, rejection helps you by allowing you to quickly make a correction. When something like that happens with a paper return, it can take weeks, or even months, to resolve,” says Smith.

3. Incorrectly reporting the Child Tax Credit and stimulus payments

If you received a third stimulus Economic Impact Payment or the advance Child Tax Credit, make sure you enter the correct amounts on your tax return. “Incorrect entries when reporting these payments mean the IRS will need to further review the tax return, creating an extensive delay,” the IRS says in a release.

The IRS is mailing special letters about amounts received for the stimulus payments and advance Child Tax Credit payments. You can also check your payments in your online account at IRS.gov.

Stimulus payments can be extra challenging because the funds may have come via direct deposit, check or gift card, and it’s possible you didn’t receive yours, says Deerwater. Some people threw away gift cards, mistaking them for junk mail.

“It may be a mistake the IRS made, and it may be a mistake you made, or there may be no mistake and you just have to be patient and go through the reconciliation process if it doesn’t match,” Deerwater says.

If you received the Child Tax Credit in 2021, you will need to fill out Schedule 8812, “Credits for Qualifying Children and Other Dependents,” and attach it to your return. This is required whether you are claiming the credit, repaying advance payments because you didn’t qualify for the credit, or claiming full or partial protection from the repayment requirement based on your family’s income. “This is different from past years,” says Smith. “Although this schedule has been around for years, not everyone has had to fill it out in the past. Omitting Schedule 8812 will delay your refund.”

Married couples should know that each spouse will receive a Letter 6419 showing their portion of any advance Child Tax Credit payments they received during 2021. If the spouses are filing jointly, they need to add those two figures together and report them on Schedule 8812. Failing to do so can delay your refund.

4. Not waiting for all your 1099s or W-2s to arrive

Maybe you’ve already filed your return, and then you receive a 1099 for an account you forgot about. Or perhaps you hold multiple jobs, and a W-2 arrives after you’ve submitted your return. The problem is that the IRS has already received all your 1099s and W-2s. So if you don’t include income from all your 1099s and W-2s on your return, your income will be lower than what the IRS has on file.

That will trigger an IRS CP2000 Notice, a letter telling you the income you reported on your return does not match what the IRS has on file. The notice will propose changes to your return, based on the agency’s files, and ask you to pay additional taxes or the agency will lower your refund. You will have to complete and sign a response form saying that you either agree with the IRS’ changes or you disagree, in which case you’ll need to provide documentation to support your case.

Another potential headache is you have all your 1099s and W-2s, but one of them is incorrect. You should carefully check your 1099s, W-2s and other year-end statements as they arrive to ensure there are no errors. “Overall, employers, banks and other payers do a great job getting these out quickly and accurately, but, like the rest of us, they’re human and sometimes make mistakes. If a statement is wrong, contact them right away and get a corrected copy,” Smith says.

5. Claiming dependents incorrectly

If you are claiming your children as dependents, make sure they are not claiming themselves on any return they file. “If that happens, that can delay your refund,” says Rodriguez Reiffert. Then the parent or child will need to correct the mistake, she says. Divorced couples must make sure only one parent is claiming any children as dependents, notes Deerwater.

Also, be sure to enter the correct Social Security number for each dependent. “If you’re paper-filing, it won’t automatically get kicked back,” Rodriguez Reiffert says. “If you e-file, you probably won’t be able to e-file your tax return if you make an error on the Social Security number or if you transpose numbers.”

Accuracy with dependents is especially important this tax season. “This year, more than ever, because there are so many family-oriented benefits available, you want to be able to claim them properly,” says Smith.

6. Sending your return to the wrong IRS processing center

The IRS will need to forward your return to the correct processing center, delaying when the agency’s staff can begin working on your filing. “You get in the back of the line at that place,” says Deerwater. “The waits are already longer than normal, and now you’re doubling the wait because you’ve made the mistake.”

Sharon Waters, a former CPA, has written for Wired.com and other publications.