10 Tax Filing Mistakes
Tax filing mistakes can cost you money. Whether that is missing out on a large refund or owing more in taxes. There are 10 tax filing mistakes we will review so you can avoid them when completing your taxes.
1. Basic Mistakes
Many mistakes are simple. For example, misspelling names or entering social security numbers incorrectly. It also includes choosing the incorrect filing status.
2. Fail to Enter Information as It Was Reported
All wages, dividends, bank interest, or other income are all reported on forms sent to the IRS. This would include W-2s, 1009s, and K-1s. What you enter on your tax returns must match what was reported on these forms to the IRS.
3. Don’t Enter Items on the Correct Line
If you are not using tax software, it can be easy to enter items on the incorrect line. Be sure to double check where you are entering the information.
4. You Automatically Take the Standard Deduction
Many people just take the standard deduction verses taking the time to itemize. Doing this could cause you to lose out on money. Tax software or a tax preparer can help you find out which gives you the greatest write off.
5. You Do Not Take Deductions You Are Entitled To
Some stay away from taking certain deductions because they are afraid of an audit. The home office deduction often falls under this umbrella. If you meet the tax law requirements it is a good decision to take the deduction as the possibility for an audit is very low.
6. You Do Not Double Check for Typos
When entering in a lot of data it is easy to transpose numbers or leave out a digit. So be sure to double check the data you have entered for simple errors.
7. You Make Math Mistakes
The IRS says math mistakes are one of the most common filing mistakes. Be sure to double check your calculations or use tax preparation software that does the math for you.
8. You Fail to Tell the IRS How to Handle Your Refund
If you do not give the IRS instructions on what to do with your refund, they will mail you a check. However, if you want to receive your refund faster you can enter your bank account information to receive your refund electronically. You can also assign your refund to next year’s taxes, contribute it to a retirement account, or US Savings Bonds.
9. You Make Payment Mistakes
It is important to make sure your payment is correctly debited. You can have it withdrawn from your bank account on a specific date. You can also mail in a check with a 1040-V. On the IRS’s website you can also make payments with credit and debit cards.
10. Do Not Forget About State Health Care Mandates
These is no longer a federal requirement to report health insurance coverage. However, some states still have their own health care mandates. These states include California, Massachusetts, New Jersey, Rhode Island, Vermont, and the District of Columbia. If you live in these areas, be sure to properly report your health insurance information.
Avoiding Tax Mistakes
By looking out for these 10 tax filing mistakes you can help prevent any hiccups with your tax return. It also helps to use a professional tax preparer or tax software.
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