The tax season is the busiest one for professional tax accountants as well as for individual taxpayers. Everyone is making efforts to have the accounts tidied up, the wealth statement up to date, and all documents ready to file return in no time.
The purpose of filing the tax return is to report all income, expenses, withholding tax, tax exemptions, etc., to the relevant tax authority. IRS is the tax authority in the case of the U.S.
With the advancement of technology, several ways have been introduced by the tax authorities for filing returns. The purpose is to facilitate the tax filers, and taxpayers have an easy-to-access and quick way of filing their returns, paying taxes, getting refunds, etc.
The tax authorities are always working to make sure that the systems are flawless and databases are up to date. However, where there is technology, there are errors as well.
However, human error always remains there. That’s why many tax filers and taxpayers have to bear the undesired rejection in the e-filing of tax returns. In this article, we are going to talk about the common IRS Reject codes, the reasons behind every rejection, and how they can be fixed.
IRS Tax Filing
The Internal Revenue Service, aka IRS, is the government agency in the U.S that is responsible for the collection of taxes and tax law enforcement in the country.
IRS was established in 1862 by President Abraham Lincoln, and the federal tax agency works under the U.S Department of the Treasury.
Different individual and employment taxes, excise, corporate taxes, gift taxes, and estate taxes come under the domain of the IRS.
Currently, the tax collection agency allows tax filers to file their tax returns in two ways: paper filing and e-filing.
Paper Filing, the conventional method of tax return filing, must be mailed at the mailing address given by the IRS. All the necessary documents, forms, and income proofs must be attached to the return.
Form 1040, Individual Income Tax Return, etc., are usually sent to the department; processing paper returns can take around 6 to 8 weeks.
Besides, the paper return must be signed by the individual or both partners in case of individual and joint tax returns, respectively.
E-filing, on the other hand, is the electronic filing of tax returns that takes less time to file and process.
Any refunds for the e-file are deposited to the tax filers within three weeks of receipt of a tax return. There is a certain method for the validation of electronic tax returns as prescribed by the IRS.
E-Filing
When it comes to e-filing, there are several ways tax filers can file their return. They can file it for free on their own, hire a tax professional or go for the popular tax software.
Filing by yourself
The income tax return deadline for the current year is July 15, 2022. You can file the tax return on your own by completing the fiscal year information at the top of form 502 and furnishing the respective documents required.
Tax software
Several market tax software and solutions have made it easy to file tax returns without professional assistance. You can use any of the software like TurboTax, HRBlock, etc., and file your federal tax return by following the simple steps given within the software.
Professional Tax Accountants and Tax Preparers
Professional tax accountants and tax preparers are always there to assist the individual and business taxpayers. You can select a tax accountant to help you file your tax return electronically with the IRS.
FREE E-File Tax Return
E-Filing available for the individual taxpayers states different options as mentioned above. The individuals can go for IRS Free File or Fillable Form if their gross income is $73,000 or less.
Besides, IRS also has its Free Tax Return Preparation Site to help individuals understand the tax return requirements and easily file the return.
VITA(IRS Volunteer Income Tax Assistance) and TCE(Tax Counseling for the Elderly) are two programs that can help qualified taxpayers to file their returns easily.
If the income of individuals is less than $58,000, they qualify for VITA. Besides, persons with disabilities and limited capability to speak English can also get help under the VITA program.
Common Reject Codes Of IRS
Whichever method you have chosen, depending on your annual gross income and other stats, your tax return can be rejected by IRS due to errors or mistakes in data filled. Generally, there are four types of electronic filing issues:
IRS Reject Codes –Name, Birthdate, SSN Mismatch
These errors are usually related to the form filling and data included in the forms. Whether the SSN number is wrongly written in the W-2 Form or Form 1040, IRS can reject the application with the relevant code. The IRS reject codes under this category are as follows:
- F1040-510
- F1040-511
- F1040-512
- F1040-513
- F1040-524
- F1040SSPR-507FW2-502
- F1040SSPR-511
- F1040SSPR-512
- F1099R-002
- F1099R-003
- F1099R-004
- F1099R-502-01
- F2439-502
- FW2-502
- FW2G-007
- FW2G-502
IRS Reject Codes –Self Select PIN/AGI Mismatch
IRS can reject individuals’ e-filed returns if there is an error in the annual gross income reported in the tax return. The reject codes related to self-select pin mismatch and AGI mismatch are as follows:
- IND-025
- IND-026
- IND-027
- IND-028
- IND-031
- IND-032
- IND-039
- IND-040
- IND-041
- IND-046
- IND-512
IRS Reject Codes –Employer ID Number(EIN) Or Payer’s ID Number
If there’s an error in EIN or Payer’s ID Number entered in the tax return form, the IRS can reject the e-file with any of the following reject codes:
- R0000-500
- R0000-503
- R0000-504-01
- R0000-507-01
- R0000-902
Ineligible for Self-Select PIN Method
The IRS reject codes related to individuals ineligible for the self-select pin method are as follows:
- SEIC-F1040-501-01
- SEIC-F1040-506-01
- SEIC-F1040-535-01
- SEIC-F1040-536-01
- SEIC-F1040-537-01
What are the Reject Code IND-031-04 or IND-032-04?
IND-031-04 and IND-032-04 are rejection codes that relate to the mismatch in the reported adjusted gross income during e-filing.
If the annual gross income is not the same as in IRS records, the e-file is rejected by the agency. Let’s have a look at each of these reject codes.
IND-031-04
031 is the reject code for the joint tax filers when the primary taxpayer’s prior-year AGI OR Self-Select PIN doesn’t match the amount recorded in IRS records.
IND-032-04
032 corresponds to mismatched AGI and Self-Select Pin of the spouse. If either of the two fields does not match the data in IRS records, IRS rejects the e-file with IND-032-04.
Why Does It Matter?
Many people wonder why does the mistake in the recorded amount matter? So the answer to this question is that Adjusted Gross Income from the prior year is treated as an electronic signature for the current year’s return.
Therefore, if this information is wrong, IRS fails to identify the person filing the return.
Tips To Avoid IRS Reject Codes
Before we move on to fixing the e-file once the IRS has rejected the return, let’s talk about tips to ensure that any mistakes and errors are avoided when filing the return.
Here are some tips for tax filers to avoid IRS reject codes IND-031 and IND-032:
- The mistake in reporting AGI is usually because of the absence of last year’s return. However, this error can be avoided by getting your AGI free of cost from the IRS Transcript. The IRS transcripts are instantly available online as well as mailed to tax filers in 5 to 10 days. You can look for Adjusted Gross Income in the transcript and report it in the current year’s tax return.
- Adjusted Gross Income cannot be calculated from Form W-2 and Form 1099.
- People who had filed a joint return last year but are going to file a separate return in the current year can use the AGI from last year’s joint return.
- You should not use adjusted gross income from amended return if you have emended it in the last year. In that case, you will take the AGI from the first return you had filed.
How Do I Fix e-file?
You made errors; IRS rejected the e-file. How to fix it?
It’s very simple to correct your AGI. All you need to do is go to the e-file section of your return and tap on it. Yes, I’m done with my return(s) and then Ready to File.
Follow the instructions >Continue >Edit(under sign and file) > Continue.
Wrap Up
We hope you will be able to file your tax returns without any errors. We have discussed the most common reject codes by IRS and how to fix the mistakes in your e-file.
Please let us know what else you want us to cover and what your queries are related to filing tax returns as individuals or jointly.
