8 Common Tax Return Mistakes and How to Avoid Them
The tax code is complicated and there’s a lot of ways to make mistakes when filling out your tax returns. While you may be tempted to decide tax mistakes are unavoidable and it’s too difficult to make sure your return is perfect, preventing the most common mistakes can be simple and save you a lot of money in overpayments, penalties for underpayments, or fines for errors. Here are some of the most common tax return mistakes and how to avoid them:
1.Math errors
Many people still do their taxes by hand and with all the different lines to add together, mistakes are almost certain. If you’re doing your own taxes, use tax software to help catch any errors before you pay the wrong amount.
2.Missing social security numbers
Whether you forget, want to leave it off for privacy, or don’t know yours, leaving your social security number off is the fastest way to have your tax return rejected. The IRS tracks all taxpayers by social security number, so you have to make sure it’s correctly entered on your return.
3.Entering things on the wrong line
This problem is most common on returns prepared by hand, but can also arise when using software to handle complex tax situations. Take care to avoid simply entering things on the wrong line, and don’t guess if you aren’t sure where to enter something. Most tax software programs provide additional explanation beyond the IRS instructions, but if that is still confusing, seek professional help.
4.Not including all the forms
The IRS wants more than a check — it wants to see how you came up with that amount and make sure your numbers match the numbers it received from your employers. Be sure to send in your complete return including all the required forms.
5.Not signing your return
Your tax return must be signed to be accepted, but many people, especially those who had someone else prepare their taxes, forget. Make sure it’s signed before you send it.
6.Not selecting the right status
If you were recently married, divorced, had kids, or had kids grow up, you run the risk of choosing the wrong status on your tax return. Remember that you should make your selection based on the tax year and not the current date.
7.Leaving out info about your income sources
Especially if you have income from multiple sources, you may end up misspelling company names or leaving out tax identification numbers. When the IRS checks your return, they might not match this income with an income report they received and think you underpaid your taxes. Be sure to fully and accurately complete each and every form on your return.
8.Not taking all deductions
From retirement accounts to dependents to a large number of other deductions, many taxpayers fail to claim them. At times this is because they fear an audit, but often it’s because they weren’t aware of a deduction. Be sure to independently research deductions you may be eligible for regardless of how you’re preparing your taxes to make sure you don’t overpay the IRS.
Add comment