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Money Management

HAVE YOU ALREADY SPENT YOUR 1999 TAX REFUND?
April 10, 2000

Many people spend their income tax refund - at least mentally - well in advance of its arrival. If you can't wait to buy that new DVD player or book that mini-vacation, you'll want to be sure that a mistake doesn't delay the IRS' processing of your return. The following 15 reminders, courtesy of the New Jersey Society of Certified Public Accountants (NJSCPA), will help to ensure a timely refund check if the IRS owes you.

  1. Check your return and schedules for mathematical errors. Transposed numbers or incorrectly totaled columns can cause significant delays in processing returns.
  2. Include the correct Social Security number for you, your spouse, and your dependents. The IRS computer matches names and numbers and automatically kicks out tax returns with discrepancies. Worse yet, the IRS can deny a personal exemption, as well as the child tax credit and dependent care credit, if you file your return without correct Social Security numbers for your dependents or care providers.
  3. Use the pre-printed, peel-off mailing label the IRS provides with the Forms package you receive in the mail. The label includes information designed to help speed the processing of your tax return. Verify the information for accuracy and make necessary corrections on the label.
  4. If you are age 65 or over, or if you are blind, be sure that you consider claiming the additional standard deduction you might be allowed.
  5. Choose the right filing status. In certain situations, married couples who file as married filing separately can lower the family's overall tax bill. If you are single and support a dependent, check to see if you qualify for the lower tax rates available to a head of household or a surviving spouse.
  6. Be sure to attach to your return all Form W-2s, and any 1099s showing federal income tax withheld.
  7. Verify that you have claimed all eligible dependents. If you provide more than half of the support of a parent, you may be able to claim the parent as a dependent even if he or she does not live with you.
  8. Check your 1998 tax return for items such as capital losses that exceeded the $3,000 limit, excess charitable deductions, and excess investment interest expense that you can carry over and claim on this year's return.
  9. When you take another job during the year, your new employer begins withholding Social Security taxes as if you had paid none at all. If you worked for more than one employer during 1999, you may be eligible to claim a credit for any overpaid Social Security taxes.
  10. Be sure that you properly document any charitable donations. Under current law, you must have a written acknowledgement from any charity to which you contributed $250 or more. A cancelled check in this situation is no longer sufficient proof.
  11. Tax credits help to lower your final tax bill, but be sure you meet the income and other eligibility requirements before claiming the Earned Income, Child or Dependent Care, HOPE Education, or Lifetime Learning credits.
  12. Make sure you sign your return and if you file jointly, be sure your spouse signs the return as well. Include all required schedules and attachments and put your Social Security number on each page in case they become detached at the IRS office.
  13. Confirm that you have used the correct column in the Tax Rate Table or appropriate Tax Rate Schedule.
  14. If you're receiving a refund, indicate whether you want the overpayment refunded in cash or credited to your estimated tax for the next year. If taxes are due, make your check payable to the United States Treasury and write your Social Security number on your check. Be sure to sign your check and to make a notation showing that it is in payment of your 1999 Form 1040 tax liability. Do not staple the check to your return.
  15. Before mailing your return, make two copies of your return, one for your own records and one for the state income tax authorities. Last minute filers should consider requesting a receipt to verify a timely postmark.

Double-checking your return will help you avoid common errors that slow the processing of your return. If you're confused about any aspect of filing an error-free return, consult a CPA for professional advice.


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Money Management is a weekly column on personal finance distributed by the NJSCPA.

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