Top 10 California Individual Income Tax Filing Mistakes

Source: Franchise Tax Board

Do you want to know how to get your tax return processed with minimal errors? Here are 10 solutions to avoid delays in the processing of your 2008 tax return:

Mistake #1 No attached proof of the claim for Excess State Disability Insurance or Voluntary Plan Disability Insurance on Form W-2 or other wage documents.

Solution: Check on line 39 of Form 540 or line 46 on 540NR to see if the disability insurance applies. If it does, attach the proper documentation to prove the claim.

Mistake #2: The original tax refund amount on the amended return does not match the original refund amount received.

Solution: Check the original refund amount on Line 28 of Form 540EZ, Line 66 of 540 or Line 73 of 540NR when you record it on the amended return.

Mistake #3: Incorrect amount of estimated tax to be transferred to next year’s return.

Solution: Make sure to check any FTB notice with adjustments that you have received, or go to under My FTB Account to check estimated tax payment amounts.

Mistake #4: Incorrect total tax amount due to an incorrect transferred exemption amount, incorrect exemption number or amount computed, or incorrect total exemption amount claim based on adjusted gross income.

Solution: Make sure that the exemption credit amount is correctly computed and transferred from Line 11 of Form 540, 540A or 540NR to Line 21 of 540A or 540, Line 26 of Form 540NR or Line 25b of Form 540NR. Also, if the federal AGI amount exceeds $163, 187 on Line 13 of Form 540A, 540 or 540NR than see instructions to claim the correct amount on Line 21 of 540A or 540.

Mistake #5: Incorrectly computing total tax amount from adjusted growth income, filing status or dependents.

Solution: Make sure that your filing status is correct. Then check if the unclaimed dependents are the dependents that are being used on Line 10 of Form 540. All names of dependents should be listed. Lastly, check to see that the CA AGI has been computed correctly on Line 17.

Mistake #6: Adjusted gross income amount is incorrect.

Solution: Check the computed adjusted gross income amount on Line 16 of Form 540 2EZ or Line 17 of Form 540 to ensure that it is correct.

Mistake #7: If there is an error in calculating the total tax or total credits, the total tax amount will be incorrect.

Solution: Verify that the computed tax amount is correct on line 21 of Form 540 2EZ, Line 34 of 540 and 540A or Line 42 of Form 540NR. Then check to ensure that the total credits are calculated correctly on Line 20 of Form 540 2EZ, Line 29 of Form 540A or 540 or Line 36 of Form 540NR.

Mistake #8: Incorrect total tax amount computed which can affect computation on any applicable schedule.

Solution: Check the total tax amount on Line 21 of form 540 2EZ, line 34 of form 540 or 540A, or line 42 of Form 540NR to make sure that the amount is computed correctly. Check any schedules to make sure that the amount is transferred over.

Mistake #9: Incorrect standard or itemized deduction amount used based on filing status.

Solution: Line 18 of Form 540A, 540 or 540NR for correct standard deduction amounts or instructions and worksheet for correct itemized deduction amount.

Mistake #10: Estimated tax payment amount claimed is different from total amount received.

Solution: Check personal tax records for estimated payments made to the FTB. Check line 46 of last year’s Form 540A or 540, or Line 53 on Form 540NR to see that the amount requested is correct. Corrections made to last year’s return can affect the total amount paid for this year. FTB notices received will show these adjustments. Verify payments that are made on