Common Tax-Filing Mistakes and How to Avoid it

Thanks to tax preparation software, more of us are making fewer mistakes on our annual tax returns. But still, just one slip in entering information on your computer could end up costing you, either in the form of a larger tax bill or a smaller refund.

And even if a mistake -- either on your computer or paper forms -- doesn't cost you cash, it could delay the receipt of any refund you're expecting.
To get exactly what you should from the Internal Revenue Service, as quickly as possible, look out for these tax-filing pitfalls. A few are new, thanks to recent law changes. Others are perennial problems taxpayers face each filing season. With a little care, you can avoid them all.
1. Pay your Roth conversion taxes
A lot of taxpayers have taken advantage of the tax law change that now allows anyone, regardless of income, to convert a traditional individual retirement account to a Roth IRA. But if you made such a change in 2010 when this conversion was first allowed, you have a tax task to take care of on your 2012 return. A special provision allowed individuals who moved their money into a Roth IRA in 2010 to spread the taxes due on converted amounts equally over the 2011 and 2012 tax years. The first half of those conversion taxes was due with your 2011 tax return. Make sure you pay the rest of the taxes with your 2012 return.
2. Homebuyer tax credit complications
Since its creation, the first-time homebuyer credit went through significant changes. It started as a $7,500 interest-free loan from Uncle Sam, changed into a true tax credit of up to $8,000 for a first-time buyer and added a $6,500 tax credit for a previous homeowner moving up to another house.
All the revisions to eligible buyer guidelines, purchase time frames, income thresholds, home price restrictions and payback requirements are a tax-filing minefield. If you're not careful, a mistake here could end up costing you the credit or at least slowing down the processing of your return.
If you're paying back the original $7,500 tax credit, the IRS has made the repayment process a bit simpler by eliminating in many cases the requirement that taxpayers file Form 5405. Now some individuals who are repaying the credit can just write the repayment amount they are including with their taxes directly on Form 1040.
3. Math miscalculations
The most common error on tax returns, year after year, is bad math. Mistakes in arithmetic or in transferring figures from one schedule to another will get you an immediate correction notice. Math mistakes also can reduce your tax refund or result in you owing more tax than you thought.
Using a tax software program to file your return can help reduce math errors. The built-in calculators do the work for you, adding, subtracting and inserting numbers on additional forms as needed. But you still have to make sure your initial numbers are correct. Entering $3,500 when the real figure is $5,300 makes a lot of tax difference. Getting the numbers right is crucial because you can be sure the IRS will be double-checking numerical entries against its copies of your tax statements (W-2, 1099s and the like). When IRS examiners find a discrepancy, they'll definitely let you know and, in many cases, will correct your mistake and refigure your taxes for you. Don't give them the chance. Make sure your math entries are right.
4. Direct deposit dangers
Taxpayers can have a refund directly deposited into multiple bank accounts. This option is a great way to save your refund money, but the more numbers you enter on a tax form, the more chances you have to enter them incorrectly. And a wrong account or routing number could cause you to lose your refund entirely.
You can divide your refund into three accounts by filing Form 8888 along with your individual return. It's not a difficult document to complete, but if you put in wrong account numbers, your refund could end up in someone else's account or be sent back to the IRS. Either way, you might not be able to retrieve your refund because there is no IRS procedure for replacing lost electronically transferred funds.
Incorrect account numbers aren't just a problem when a refund is split multiple ways. Even if your refund is going to just one account, make very sure you enter your account and bank routing numbers correctly.
5. Additional income, additional filing work
Did you have a side job this year? If so, as a contractor you probably received a Form 1099-MISC detailing the extra earnings.
What about savings and investment accounts? For these, you should have received Form 1099-INT and Form 1099 DIV statements.
In each 1099 instance, the IRS knows precisely how much extra money, either as wages or unearned investment income, you made as soon as you did, thanks to the copies of your 1099 forms that went to the tax agency.
If you forget to include any of these earnings on your return, the IRS examiners will let you know you owe taxes on it, too. And depending on when your oversight is discovered, you also could owe penalties and interest on the unreported earnings.
6. Filing status errors
Make sure you choose the correct filing status for your situation. You have five options, and each could make a difference in your ultimate tax bill.
If this is the first tax-filing season you've been divorced and you now are a single parent, head-of-household probably will be more beneficial. And you're still married, but you and your spouse are thinking about filing separate tax returns? That works in some cases, but not all.
Make sure you know what each tax-filing status entails, and choose the one that best fits your personal and tax situation.
7. Social Security number oversights
Because the IRS stopped putting taxpayer Social Security numbers on tax package labels in response to privacy concerns, some taxpayers forget to write in their identification numbers. Your tax ID number is crucial because there are so many transactions -- income statements, savings account interest, retirement plan contributions -- keyed to this number.
The nine-digit sequence also is vital to claim several tax credits, such as the child tax and additional child tax credits as well as ones for educational expenses and dependent care costs.
And make sure the names associated with the Social Security numbers match Social Security Administration records. A difference here also will cause the IRS to kick out or slow down your return.
8. Complete charitable contributions
Did you give to charitable groups last year? All types of donations, from cash to cars, could be valuable tax deductions, so make sure you count them all when you file. Be sure to follow the donation tax rules, the most important being that you give to a qualified organization -- that is, one that has tax-exempt status with the IRS. Also be careful when calculating any gifts of clothing and household items. Tax law now requires that these donations be in good or better condition or the deduction is disallowed.
9. Signature required
Sign and date your return. The IRS won't process it if it's missing a John Hancock, and that means on e-filed returns, too. Taxpayers filing electronically must sign the return electronically using a personal identification number, or PIN. To verify your identity, you'll have to provide the PIN you used last year or your adjusted gross income from your previous year's tax return.
Your tax software should walk you through the e-signature process, but if you're still mailing your return, don't be in such a hurry that you stuff your 1040 in the preaddressed IRS envelope without signing it. And if it's a joint filing, you and your spouse must sign.
10. Missing the deadline
Don't miss the impending April 15 tax deadline. If you owe the IRS and that's the reason you're thinking of not filing, that's a bad idea. If you don't file a return, you'll face even stiffer penalties. So send in the paperwork, pay what you cann and talk with the IRS or your tax professional about the next steps.

'Two and a Half Men' writers take a jab at Angus T. Jones, steal show from guest star Jaime Pressly

"Two and a Half Men" fans have given majorly mixed reviews of the long-running series since Ashton Kutcher replaced Charlie Sheen in 2011, but it would be hard to argue that Jaime Pressly's guest spot on Thursday night's episode wasn't a ton of fun. Surprisingly, though, it wasn't Pressly's performance that stole the show; Conchata Ferrell's character, Berta, delivered a memorable tongue-in-cheek zinger about Jake (Angus T. Jones) -- saying to Alan (Jon Cryer) that at least he's not "one of those showbiz kids who go off the rails."

Whoa! Did the writers just make a statement about Angus T. Jones's highly publicized outburst against "Two and a Half Men"? In November, Jones bit the hand that's been feeding him for a decade when he told fans of the show to stop watching it -- even going so far as to call the series "filth."

Watch his rant:

That jab might have slightly upstaged Pressly's performance, but the Emmy-winning actress ("My Name Is Earl") held her own as 19-year-old Jake's tough-chick girlfriend, Tammy. She might only be 36, but she definitely gave an anxious Alan a "cougar" vibe.

Her performance as an inked-up mom of three and savvy business owner (she owns her own tattoo shop, called "Tammy's Tatties," of course), who's taken some hard knocks and kept on trucking, added much-needed range to a show that's known for easy jokes and one-dimensional characters that often don't push its stars' capabilities. It's also clear that Pressly hasn't lost her comedic chops, nailing lines like "Give me a body part and I can paint it, pierce it, or plug it." That raspy voice doesn't hurt, either!

So how does this seemingly age-inappropriate relationship shake out? Well, there was almost a Vegas wedding! At least in Jake's mind. Jake's so love-struck with his blond-bombshell girlfriend that he wants to propose and then elope to Vegas the next day. He even swears a very resistant Walden (Ashton Kutcher) to secrecy.

When Alan has a one-on-one chat with Tammy, he realizes that she is a beautiful, cool, smart woman (even if she just got her ankle bracelet off a week ago) with whom he actually has a lot in common. She once freaked when her 17-year-old daughter brought home an older man. But Alan is most pleased (and relieved) to hear that she's approaching the relationship with Jake as a lighthearted one that's for the moment and not forever.

Don't breathe a sigh of relief just yet, Alan; when Walden blurts out Jake's secret at the dinner table (hey, he said he wasn't good with secrets), Alan flies off the handle. Especially after a flattered Tammy seems into the idea of getting hitched. Luckily for everyone, she later tells Jake that she wants a family wedding that brings their loved ones together instead of driving them apart. Apologies are accepted all around, and for now it looks as if the wedding is off. Here's hoping that Jaime Pressly sticks around for this story arc!

Higher Payroll Tax Pinches Those With Least to Spare

Jack Andrews and his wife no longer enjoy what they call date night, their once-a-month outing to the movies and a steak dinner at Logan’s Roadhouse in Augusta, Ga. In Harlem, Eddie Phillips’s life insurance payment will have to wait a few more weeks. And Jessica Price is buying cheaper food near her home in Orlando, Fla., even though she worries it may not be as healthy.
Like millions of other Americans, they are feeling the bite from the sharp increase in payroll taxes that took effect at the beginning of January. There are growing signs that the broader economy is suffering, too.
Chain-store sales have weakened over the course of the month. And two surveys released last week suggested that consumer confidence was eroding, especially among lower-income Americans.
While these data points are preliminary — more detailed statistics on retail sales and other trends will not be available until later this month — at street level, the pain from the expiration of a two-percentage-point break in Social Security taxes in 2011 and 2012 is plain to see.
“You got to stretch what you got,” said Mr. Phillips, 51, a front-desk clerk and maintenance man for a nonprofit housing group who earned $22,000 last year. “That little $20 or $30 affects you, especially if you’re just making enough money to stay above water.” So he has taken to juggling bills, skipping a payment on one this month and another next month.
“I’m playing catch-up each month,” he said. “You go to the supermarket and you can’t spend what you used to.”
Jack Andrews has it slightly better than Mr. Phillips. He earns a bit more than $40,000 a year manufacturing ceramics in a local factory, but because his wife, Cindy, is disabled, he is the sole breadwinner. Something had to give now that he is earning about $800 less a year, or $66 a month, and it was the couple’s monthly night out.
“It’s just gotten out of reach,” Mr. Andrews said.
The tax break, which was pushed by the White House to stimulate spending in 2011 and extended in 2012, was always supposed to be temporary. But with pressure building in Washington to reduce the deficit and politicians fighting bitterly over whether to raise taxes on the very rich, the question of how the increase in Social Security taxes would affect the poorest workers did not seem to garner much debate on either side of the aisle.
“I don’t see any reason to consider supporting its extension,” said Timothy F. Geithner, the Treasury secretary, in testimony last year. Even Nancy Pelosi, a reliable liberal who leads the Democratic minority in the House of Representatives, was for letting it expire.
The higher rate applies to all earned income up to $113,700. For a household earning $100,000 a year, the two-percentage-point increase means an additional $2,000 a year in payroll deductions. Economists estimate that the payroll tax increase will reduce disposable income by about $120 billion and shave half a percentage point from economic growth in the first quarter — a significant blow given that the economy is expected to expand only 1 to 2 percent in the first half of 2013.
“If you wanted to design a policy to squeeze the spending of lower- and middle-income households, raising the payroll tax is the way to do it,” said Ian Shepherdson, chief economist at Pantheon Macroeconomic Advisors. “It’s very regressive.”
Retailing analysts and economists say high-end earners will largely be spared.
“I wouldn’t expect it to have much of an effect on BMW consumption,” said Richard H. Thaler, a professor of behavioral science and economics at the University of Chicago’s Booth School of Business. “The people who will notice it the most are the ones making the least.”
In Medford, Ore., Darchelle Skipwith had to scrap her monthly budget and start over when the law changed.
She is buying less meat; driving less often to see her sister, who lives 12 miles away in Eagle Point; and putting less away in savings. In August, Ms. Skipwith, 42, hopes to get a raise of 50 cents an hour at her job stacking shelves at Walmart, which should help make up the difference.
For now, she has no choice but to change her daily routine.
“I added it up — it’s about $75 a month,” Ms. Skipwith said. “That’s not a lot for some people, but mine is the only paycheck. I don’t have extra money coming in.”
Of course, taxes are going up on wealthier Americans, too, with a rise in marginal rates on income above $400,000 for individuals and higher taxes on capital gains and dividends. But millions of individual decisions by poorer Americans in Medford, Augusta, Harlem and elsewhere are quickly adding up.
Monthly data for chain-store sales in January will not be released until later this week, but the weekly data already available for last month showed a steady deterioration in shopping activity.
“There is something going on,” said Chris G. Christopher Jr., senior principal economist at IHS Global Insight. “The payroll tax seems to be cutting into things.”
That pattern was apparent in a Thomson Reuters/University of Michigan survey of consumer sentiment released on Friday, according to Richard T. Curtin, who directs surveys of consumers at the university.
When asked how their financial situation had changed in January, 32 percent of people with incomes below $75,000 said their pay had dropped, compared with 13 percent who said it had increased. By contrast, 38 percent of people earning more than $75,000 said their wages had gone up last month, and 23 percent said they had gone down.
“We rarely see such divergent trends,” Dr. Curtin said. “Mostly it was the payroll tax hurting the lower incomes, while higher-income folks had a boost from things like dividends.”
In fact, as companies paid out dividends to shareholders early to avoid the higher tax rate for 2013, personal dividend income increased at a seasonally adjusted monthly rate of 34.3 percent in December, compared with a 4.5 percent rise in November.
But that did little to help Jessica Price, who holds down two jobs in Orlando. Most weekends she works at a clothing store in a shopping center near the Universal Studios theme park, within sight of the roller coasters, and she spends weekdays collecting tolls on a local expressway.
Ms. Price, 20, whose annual income is $15,000 to $16,000, prefers shopping at Whole Foods, the upscale supermarket chain, which is healthier but more expensive. But since the payroll tax went up, she has been going more often to Publix and Walmart.
“The food that has a lot of fat and food coloring is cheaper,” she said. “It’s a lot more expensive to eat healthier. But now I’m actually looking at the price tag on things rather than grabbing them.”

Gisele Bundchen Debuts 2-Month-Old Daughter Vivian Lake

Gisele and her mini-me, Vivian. (Facebook)Two months after she entered the world, Gisele Bundchen and Tom Brady’s daughter Vivian Lake has finally made her debut … and, of course, she’s as cute as we assumed she’d be. On Friday morning, the Brazilian supermodel posted this sweet photo on her Facebook page, writing, "Love is everything!!! Happy friday, much love to all."
The mother-daughter duo are currently in Hawaii for a family vacation now that the NFL season is over. The brood, which also includes 3-year-old son Benjamin, touched down in the tropical paradise on Thursday. And as they de-boarded their private jet, Bundchen carried off her most precious cargo: her infant daughter, dressed in a girly pink-and-white hooded sweater and pink pants.

Gisele and Vivian. (Splash News)Tom and Benjamin. (Splash News)Brady, meanwhile, handled the actual luggage – including Benjamin’s adorable monkey backpack – as he and what looked like a nanny escorted the little guy towards a group of Hawaiian locals waiting to welcome the family with floral leis and a strand of black beads for the New England Patriots quarterback.
As sure as we were that Vivian would be a cutie, we also assumed the Victoria’s Secret supermodel’s body would bounce back with the greatest of ease. And on Thursday, she looked to have lost every ounce of the weight she had gained before delivering Vivian on December 5.
Two days after the home birth, Bundchen, 32, announced their happy news on her Facebook page, along with a close-up shot of the newborn’s hand in hers.
“We feel so lucky to have been able to experience the miracle of birth once again and are forever grateful for the opportunity to be the parents of another little angel,” she wrote. “Vivian Lake was born at home on December 5. She is healthy and full of life. Thank you all for your support and well wishes. We wish you and your families many blessings.”
If Bundchen has her way, there will also be more blessings for her and Brady, 35.
“I want to have lots of children," she told Britain's Hello! Magazine in 2010. "It doesn't matter if my body changes. It is the most marvelous thing. For example, they sometimes say that your breasts begin to sag, but I couldn't care less."

Barbie’s packing up, leaving Malibu, selling Dreamhouse for $25 million

here is perhaps the most bizarre property listing you'll ever come across:

Barbie's Dreamhouse is listed on Trulia for $25 million.

That's right. The pink plastic one. The one that isn't real*.
Stories like this are always tricky to report. It's a naked gambit by Mattel for publicity, of course, which probably ought to make it an automatic "ignore." (And darn it, the listing isn't on the Yahoo!-Zillow Real Estate Network, either. Boooo.) But at the same time it's a little, well, irresistible ... right? We're assuming some part of you must agree if you're reading this.
So we're succumbing to temptation.
The story goes that Barbie has lived in Malibu, Calif., for more than 40 years, but she's ready for a change. She says she's open to "all seven continents" and is eager to try out her skills with "over 37 languages" she's picked up in her lifetime. And she doesn't require anything beyond the "basics" -- including "a never-ending closet, transforming furniture, a Glitterizer ... " (How do we know this? We watched Barbie's video interview about the impending move, of course!)

One of the photos from the property listing. Click this photo or the one at the top to go to see more images from …She has hired celebrity Realtor Josh Altman, star of Bravo TV's "Million-Dollar Listing," who's marketing it as "the ultimate bachelorette compound" with "clean lines, sparkly surfaces, dazzling details, and soaring ceilings" -- an "innovatively scaled" home with three stories, 8,500 square feet and a single bedroom. (Click here or on either photo above to go to a slideshow of photos from the property listing.)

The listing says it's "the only house in Malibu with a truly unobstructed view of the ocean (after all, it only has three walls)" as well as "a self-flushing toilet and fireplace that crackles even when it's not on." It also features "voluminous 119-centimeter ceilings, pink crown molding, custom Pantone® 219C hardwood floors" and a "pink Poliform kitchen ... complete with pink granite countertops."

In other media materials, Altman tells a prospective buyer about the amenities: "Let's just put it this way: Have you ever seen a pink elevator on a pulley system? ... The pink car and the pink boat? Those items are sold separately."
(In real life, Altman does have actual L.A.-area listings: 6698 Whitley Terrace for $899,000, 3549 N. Knoll Drive for $2.4 million, 1642 N. Crescent Heights Blvd. for $1.6 million and 1301 Sunset Plaza Drive for just shy of $2 million.)
It's the kickoff of a yearlong brand campaign, and we have to admit, we found ourselves getting immersed in the narrative in spite of ourselves. As Stephanie Cota, a Mattel senior vice president for global marketing, puts it: "People really want to know what's going on in her life." Given Barbie's 7 million-strong Facebook following, we're not inclined to argue.
If it's true that 90 percent of girls age 3 to 10 own at least one Barbie, and that the average number owned by girls 3 to 6 is a dozen, as Mattel says, then it's not hard to imagine the campaign picking up steam.

The 1979 Dreamhouse. Click the photo for a slideshow of designs through the decades.And with savvy details like Barbie's enlistment of a "Dream Team of interior designers [including] Los Angeles-based textile designer and design influencer Lulu Dekwiatkowski, New York/Palm Beach based designer Celerie Kemble and West Coast fashion and home product designer Trina Turk" -- as the news release reports -- then there's a pretty decent chance that grown-ups will, like us, grow guiltily curious, too.

We can't help but wonder where she'll ultimately settle and -- more significant for Mattel -- we're pretty interested to see the design of the new Dreamhouse, which is set to go on sale in toy stores around Christmas. Is it possible that the new model will be less of a monstrous confection?
Please, Lulu and Celerie and Trina, make it be so!
Tell us in the comments: Where do you think Barbie should move to? And what should a Dreamhouse look like in 2013? (We've also put together a slideshow of Barbie Dreamhouse designs through the decades; click here or on the 1979 photo to take a look.)

*Note: Just to be crystal-clear, nothing is really for sale. Although real people and businesses like Trulia are participating in Mattel's branding campaign, the narrative is entirely fictional. However, Mattel really will be releasing a new Dreamhouse design in toy stores for the holidays this year, and as far as we can tell, it truly is taking design input from real-life designers. (According to the news release, Barbie is "partnering with a group of admired style setters, designers and industry experts to re-imagine the Barbie Dreamhouse for today.") And to make things even more meta/confusing, Mattel will be building full-size Barbie Dreamhouses worldwide for fans to walk through in a "Dreamhouse Experience"; the first ones will open in Florida and Berlin this month.

If you want to read even more about the Barbie Dreamhouse -- and we wouldn't blame or judge you for it -- the New York Times has an interesting article about the branding campaign. Plus, a few months ago, our friends at Curbed wrote an interesting post about the controversial Architect Barbie; Curbed has also written a fun post about the current Dreamhouse campaign.