How to Avoid Common Mistakes

Mistakes may delay your refund or result in notices being sent to you.

1. Make sure you entered the correct name and SSN for each dependent you claim on line 6c. Also, make sure you check the box in column (4) of line 6c for each dependent who is also a qualifying child for the child tax credit.
2. Check your math, especially for the child tax credit, earned income credit, taxable social security benefits, total income, itemized deductions or standard deduction, deduction for exemptions, taxable income, total tax, Federal income tax withheld, and refund or money you owe.
3. Be sure you use the correct method to figure your tax.  See the instructions for line 40 that begin on page 32.
4. Be sure to enter your social security number (SSN) in the space provided on page 1 of Form 1040.  If you are married filing a joint or separate return, also enter your spouse's SSN.  Be sure to enter your SSN in the space next to your name.
5. Make sure your name and address are correct on the peel-off label.  If not, enter the correct information.  If you did not get a peel-off label, enter your (and your spouse's) name in the same order as shown on your last return.
6. If you are taking the standard deduction and you checked any box on line 35a or you (or your spouse if filing jointly) can be claimed as a dependent on someone else's 2000 return, see page 31 to be sure you entered the correct amount on line 36.
7. If you received capital gain distributions but were not required to file Schedule D, make sure you check the box on line 13.
8. Remember to sign and date Form 1040 and enter your occupation.
9. Attach your W-2 form(s) and other required forms and schedules.  Put all forms and schedules in the proper order.  See Assemble Your Return on page 52.
10. If you owe tax and are paying by check or money order, be sure to include all the required information on your payment.  See the instructions for line 69 on page 51 for details.

What Are Your Rights as a Taxpayer?

You have the right to be treated fairly, professionally, promptly, and courteously by IRS employees. Our goal at the IRS is to protect your rights so that you will have the highest confidence in the integrity, efficiency, and fairness of our tax system. To ensure that you always receive such treatment, you should know about the many rights you have at each step of the tax process. For details, see Pub. 1.

Innocent Spouse Relief

You may qualify for relief from liability for tax on a joint return if (1) there is an under-statement of tax because your spouse omitted income or claimed false deductions or credits, (2) you are divorced, separated, or no longer living with your spouse, or (3) given all the facts and circumstances, it would be unfair to hold you liable for the tax. See Form 8857 or Pub. 971 for more details.

Income Tax Withholding and Estimated Tax Payments for 2001

If the amount you owe or the amount you overpaid is large, you may want to file a new Form W-4 with your employer to change the amount of income tax withheld from your 2001 pay. In general, you do not have to make estimated tax payments if you expect that your 2001 Form 1040 will show a tax refund or a tax balance due the IRS of less than $1,000. If your total estimated tax (including any household employment taxes or alternative minimum tax) for 2001 is $1,000 or more, see Form 1040-ES. It has a worksheet you can use to see if you have to make estimated tax payments. For more details, see Pub. 505.

Do Both the Name and SSN on Your Tax Forms Agree With Your Social Security Card?

If not, certain deductions and credits may be reduced or disallowed, your refund may be delayed or you may not receive credit for your social security earnings. If your Form W-2, Form 1099, or other tax document shows an incorrect SSN or name, notify your employer or the form-issuing agent as soon as possible to make sure your earnings are credited to your social security record. If the name or SSN on your social security card is incorrect, call the Social Security Administration at 1-800-772-1213.

How Do You Make a Gift To Reduce the Public Debt?

If you wish to do so, make a check payable to “Bureau of the Public Debt.” You can send it to: Bureau of the Public Debt, Department G, P.O. Box 2188, Parkersburg, WV 26106-2188. Or, you can enclose the check with your income tax return when you file. Do not add your gift to any tax you may owe. See page 51 for details on how to pay any tax you owe.

If you itemize your deductions for 2001, you may be able to deduct this gift.

Address Change

If you move after you file, always notify the IRS in writing of your new address. To do so, you can use Form 8822.

How Long Should Records Be Kept?

Keep a copy of your tax return, worksheets you used, and records of all items appearing on it (such as W-2 and 1099 forms) until the statute of limitations runs out for that return. Usually, this is 3 years from the date the return was due or filed, or 2 years from the date the tax was paid, whichever is later. You should keep some records longer. For example, keep property records (including those on your home) as long as they are needed to figure the basis of the original or replacement property. For more details, see Pub. 552.

Amended Return

File Form 1040X to change a return you already filed. Generally, Form 1040X must be filed within 3 years after the date the original return was filed, or within 2 years after the date the tax was paid, whichever is later. But you may have more time to file Form 1040X if you are physically or mentally unable to manage your financial affairs. See Pub. 556 for details.

Need a Copy of Your Tax Return?

If you need a copy of your tax return, use Form 4506. If you have questions about your account, call or write your local IRS office. If you want a printed copy of your account, it will be mailed to you free of charge.

Death of a Taxpayer

If a taxpayer died before filing a return for 2000, the taxpayer’s spouse or personal representative may have to file and sign a return for that taxpayer. A personal representative can be an executor, administrator, or anyone who is in charge of the deceased taxpayer’s property. If the deceased taxpayer did not have to file a return but had tax withheld, a return must be filed to get a refund. The person who files the return should enter “DECEASED,” the deceased taxpayer’s name, and the date of death across the top of the return.

If your spouse died in 2000 and you did not remarry in 2000, you can file a joint return. You can also file a joint return if your spouse died in 2001 before filing a 2000 return. A joint return should show your spouse’s 2000 income before death and your income for all of 2000. Enter “Filing as surviving spouse” in the area where you sign the return. If someone else is the personal representative, he or she must also sign.

The surviving spouse or personal representative should promptly notify all payers of income, including financial institutions, of the taxpayer’s death. This will ensure the proper reporting of income earned by the taxpayer’s estate or heirs. A deceased taxpayer’s social security number should not be used for tax years after the year of death, except for estate tax return purposes.

Claiming a Refund for a Deceased Taxpayer

If you are filing a joint return as a surviving spouse, you only need to file the tax return to claim the refund. If you are a court-appointed representative, file the return and attach a copy of the certificate that shows your appointment. All other filers requesting the deceased taxpayer’s refund must file the return and attach Form 1310.

For more details, use Tele-Tax Topic 356 or see Pub. 559.

Explore IRS e-file!

Fast Refunds, Secure, Accurate

Join the 40 million taxpayers who e-file! You can file and get your refund or even pay electronically.  IRS e-file offers fast, safe, accurate, and easy alternatives to traditional paper returns.  There is a quick and automatic IRS computer check for errors or other missing information upon receipt of the tax return infornation. This year, more forms and schedules can be e-filed-even those with a foreign address! The chance of an audit of an e-filed tax return is no greater than a paper tax return.  Millions of taxpayers just like you filed their tax returns electronically using an IRS e-file option because of the many benefits:

• FREE Filing!
• Fast Refunds!
• Security!
• Accuracy!
• New Paperless Filing!
• Proof of Acceptance!
• Electronic Payments!
• File Federal and State Tax Returns Together!

Here's How You Can Participate in IRS e-file

Use an Authorized IRS e-file Provider. Many tax professionals file tax returns electronically for their clients. Ask for IRS e-file! You can prepare your own return and have a professional electronically transmit it to the IRS or you can have your return prepared and transmitted by the tax professional. Depending on the tax professional and the specific services requested, a fee may be charged. Look for the “Authorized IRS e-file Provider” sign, or check the IRS Web Site and click on "Electronic Services" for an "Authorized IRS e-file Provider" near you.

IRS e-file Through Your Personal Computer. You can file your tax return in a fast, safe, convenient way through your personal computer right from home. And now it's paperless! Find free filing opportunities at our Web Site, click on "Electronic Services" and then click on "IRS e-file Partners."  For a list of software companies that participate in the IRS e-file program, visit our Web Site, click on "Electronic Services" and then click on "On-Line Filing Software Companies."  Depending on which software program you use to file your taxes, you will need a modem and/or Internet access. IRS e-file using a personal computer is available 24 hours a day, 7 days a week.

IRS e-file Using a Telephone. For millions of eligible taxpayers, TeleFile is the easiest way to file. Tele-File allows you to file your simple Federal tax return using a touch-tone phone. Only taxpayers who met the qualifications for Form 1040EZ in the prior year may qualify to use TeleFile for the current year. A TeleFile Tax Package is automatically mailed to those who qualify. TeleFile is completely paperless - there are no forms to mail. Just complete the TeleFile Tax Record in the booklet, pick up a telephone, and call the toll-free number any time day or night. TeleFile usually takes about 10 minutes and it's absolutely FREE. Parents: If your children receive a TeleFile Tax Package, please encourage them to use TeleFile.

IRS e-file Through Employers and Financial Institutions. Some businesses offer free e-file to their employees, members, or customers. Others offer it for a fee. Ask your employer or financial institution if they offer IRS e-file as an employee, member, or customer benefit.

Visit a VITA or TCE Site. Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) sites are open to low-income individuals, others who need help with their tax returns, and the elderly. Both programs are free and can be found in community locations such as libraries, colleges, universities, shopping malls, and retirement and senior centers. Find the closest VITA or TCE site by calling 1-800-829-1040.  Remmber to take your, and your spouse's and your dependent's social security card and other identifying documents.  Ask for IRS e-file at these sites.

More About IRS e-file Benefits

Get a Fast Refund. Choose Direct Deposit-a fast, simple, safe, secure way to have your Federal income tax refund deposited automatically into your checking or savings account. To choose Direct Deposit, taxpayers indicate on the refund portion of the electronic return, the financial institution's routing number, the account number, and the type of account-either checking or savings. Taxpayers who file electronically and choose Direct Deposit receive their refunds in less than half the time that paper filers do!

Paperless Filing. Paperless filing is available to most taxpayers who file electroni-cally using tax preparation software or file through a tax professional. The process includes self-selecting a five-digit Personal Identification Number (PIN) and entering two pieces of information from your 1999 tax return. If you don't have your 1999 return, call the IRS (see page 13) to get a free transcript of your account. It may take 7 to 10 days to receive the transcript. Paperless filing is also available for first-time filers who were 16 or older on December 31, 2000. There's nothing to sign and nothing to mail; not even your W-2s.

Electronic Payment Options. If you have a balance due, you can make your payment electronically.

Direct Debit. You can file and pay in a single step by authorizing a direct debit (automatic withdrawal) payment from your checking or savings account. This option is available through tax software packages, tax professionals, and TeleFile. If you select the direct debit payment option, you will be prompted to enter your account number, your financial institution's routing number, and account type (checking or savings). You can schedule the payment for a future date up to and including the tax return due date (April 16, 2001). Check with your financial institution to make sure that an automatic withdrawal is allowed and to get the correct routing and account numbers.

Credit Card. You can also file and pay in a single step by authorizing a credit card payment. This option is available through some tax software packages and tax professionals. Two other ways to pay by credit card are by phone or Internet (see page 51, "Amount You Owe" for details). Service providers charge a convenience fee for credit card payments.

File Federal and State Tax Returns Together. File Federal and state tax returns together using e-file and double the benefits of e-file! The tax preparation software automatically transfers relevant data from the Federal return to the state return as the information is entered. All states that have income taxes support e-file. Most states offer the same benefits that IRS e-file offers. Check the IRS Web Site for a list of companies that provide state on-line filing software. Form 1040PC Is History! The IRS no longer accepts the Form 1040PC format. If you used Form 1040PC in the past, the IRS encourages you to file using the fastest, most accurate way to file-IRS e-file!

Other Ways To Get Help

Send Your Written Questions to the IRS. You should get an answer in about 30 days. If you do not have the address, call us. See page 13 for that number. Do not send questions with your return.

Assistance With Your Return. IRS offices can help you prepare your return. An assister will explain a Form 1040EZ, 1040A, or 1040 with Schedules A and B to you and other taxpayers in a group setting. You may also be able to file your return electronically by computer free of charge at some IRS offices. To find the IRS office nearest you, look in the phone book under “United States Government, Internal Revenue Service” or call us. See page 13 for the number.

VITA and TCE. These programs help older,disabled, low-income, and non-English-speaking people fill in their returns. For details, call us. See page 13 for the number. If you received a Federal income tax package in the mail, take it with you when you go for help. Also take a copy of your 1999 tax return if you have it. Or to find the nearest AARP Tax-Aide site, visit AARP’s Internet Web Site at www.aarp.org/taxaide tax aide or call 1-877-227-7844.

On-Line Services. If you subscribe to an on-Line service, ask about on-Line filing or tax information.

Large-Print Forms and Instructions. Pub. 1614 has large-print copies of Form 1040, Schedules A, B, D, E, EIC, and R, and Form 1040-V, and their instructions. You can use the large-print forms and schedules as worksheets to figure your tax, but you cannot file on them. You can get Pub. 1614 by phone or mail. See pages 7 and 57.

Help for People With Disabilities. Telephone help is available using TTY/TDD equipment. See page 13 for the number. Braille materials are available at libraries that have special services for people with disabilities.

Interest and Penalties

You do not have to figure the amount of any interest or penalties you may owe. Because figuring these amounts can be complicated, we will do it for you if you want. We will send you a bill for any amount due.

If you include interest or penalties (other than the estimated tax penalty) with your payment, identify and enter the amount in the bottom margin of Form 1040, page 2. Please do not include interest or penalties (other than the estimated tax penalty) in the amount you owe on Line 69.

Interest

We will charge you interest on taxes not paid by their due date, even if an extension of time to file is granted. We will also charge you interest on penalties imposed for failure to file, negligence, fraud, substantial valuation misstatements, and substantial understatements of tax. Interest is charged on the penalty from the due date of the return (including extensions).

Penalties

Late Filing. If you do not file your return by the due date (including extensions), the penalty is usually 5% of the amount due for each month or part of a month your return is late, unless you have a reasonable explanation. If you do, attach it to your return. The penalty can be as much as 25% (more in some cases) of the tax due. If your return is more than 60 days late, the minimum penalty will be $100 or the amount of any tax you owe, whichever is smaller.

Late Payment of Tax. If you pay your taxes late, the penalty is usually ^1/2 of 1% of the unpaid amount for each month or part of a month the tax is not paid. The penalty can be as bmuch as 25% of the unpaid amount. It applies to any unpaid tax on the return. This penalty is in addition to interest charges on late payments.

Frivolous Return. In addition to any other penalties, the law imposes a penalty of $500 for filing a frivolous return. A frivolous return is one that does not contain information needed to figure the correct tax or shows a substantially incorrect tax because you take a frivolous position or desire to delay or interfere with the tax laws. This includes altering or striking out the preprinted language above the space where you sign.

Other. Other penalties can be imposed for negligence, substantial understatement of tax, and fraud. Criminal penalties may be imposed for willful failure to file, tax evasion, or making a false statement. See Pub. 17 for details on some of these penalties.

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