7 Common Tax Mistakes That You Can Avoid
There are some common tax mistakes that many people make when filing their returns. If you watch out for these mistakes, you can help to speed up the process and get your tax return more quickly. These are seven common tax mistakes that you can avoid.
1.) Social Security Number
One of the most common mistakes that people make on their tax return is omitting their Social Security number or putting an incorrect Social Security number on their tax return. In fact, thousands of tax returns are submitted to the IRS every year with missing or incorrect Social Security numbers. Making this mistake will slow the processing of your tax return. The IRS will reject your deductions and exemptions. If you are supposed to get a refund, it will be delayed. If you owe taxes, you could be subjected to late fees.
There is a surefire way to avoid making this mistake. Check your Social Security number and the numbers of all your dependents. Get out all of your Social Security numbers, and verify them as you enter them onto your tax return. It only takes a minute, and it can save a significant amount of time in the processing of your tax return and delivery of your refund.
2.) Omitting Income Verification
Many people inadvertently omit verification of their sources of income when filing their tax returns. You must have a W-2 or 1099 for every source of income. If you don’t include these documents with your tax return, it raises questions with the IRS. This could prompt the IRS to conduct an audit. It’s much easier to just provide the appropriate documentation the first time around than to undergo an audit later. If your employer hasn’t provided you with the tax forms that you need, give them a call and request a W-2 or 1099.
3.) Math Errors
Yes, there are still people who file their taxes using a paper, pen, and calculator. This can (and does) lead to simple mathematical errors, which cause big problems. This can result in overpayment of taxes or sacrificing a refund. Double and triple check your calculations, or use tax preparation software that does all the calculations for you.
4.) Claiming Credits and Deductions
Many people incorrectly claim credits and deductions to which they are not entitled, or do not claim the credits and deductions for which they actually are eligible. If you miss out on claiming the deductions that you qualify for, you can end up overpaying. However, if you claim a credit or deduction to which you are not entitled, it can be perceived by the IRS as tax evasion. If you aren’t sure, get professional advice.
5.) Omitting Date and Signature
The IRS will not accept your tax return if it is not signed and dated. This could lead to your return being considered late simply because you forgot to sign and date it, resulting in fees and penalties. If you E-file your return, you can sign it electronically.
6.) Filing Late
If you know that you won’t be able to file your taxes on time, request an extension in advance of the deadline. If you don’t file and don’t request an extension, you will be charged late fees.
7.) Omitting Payment
If you end up owing the IRS when you file your taxes, be sure to include your payment with your return. Write your Social Security number, tax form number and tax year on your check or money order in order to speed the processing of your return.
By Biz Blog Advisor, Kjell Andreassen