Top 5 Most Common Tax Filing Mistakes
Don’t you just love taxes? The forms, the fear, the April 15 deadline looming over your head like the executioner’s axe. But, since taxes are inevitable, let’s get down to the question at hand: What’s the best and easiest way to save money and reduce stress during tax season? Answer: Avoid some of the most common tax filing mistakes. Ace these five points, and your tax season will be relatively painless.
5 Not Including Your Social Security Number and Signature
The IRS is adamant on this point: Always include your Social Security Number in your tax return. That way they can positively identify you as a unique taxpayer. Also, if you have dependents and reference them in your tax return, make sure their Social Security Numbers are present and correct. Finally, don’t forget to sign your tax return. If you’re filing using the dead-tree method, physically sign the return. If you file electronically, get a Personal Identification Number (PIN) and enter it. Fail to include either of these pieces of data, and your tax season will be extended for weeks.
4 Not Documenting Your Return
For some unfathomable reason, the IRS doesn’t just take you at your word when you claim you’ve made a certain amount of money or that you’ve contributed money to the Save the Hipsters Foundation. Back up your claims with the appropriate forms. These include not only W-2 forms from employers, but also receipts for charitable contributions, property tax, medical costs and other items.
3 Using That New Math
Along with the rest of the points covered in this list, the IRS cites math errors as one of the most common tax filing mistakes every year. Use a calculator for addition and subtraction. If you use tax preparation software that does the math for you, don’t blindly go along with whatever the machine spits out. Check over the results to ascertain whether they make intuitive sense. If you see a suspicious number in your figuring, review your initial figures.
2 Claiming Fewer Tax Credits Than You Deserve
If you hate saving money, or if you’re feeling especially charitable this year and would like to stuff your extra cash into the welcoming pockets of Uncle Sam, feel free to ignore this point. If, on the other hand, you actually like not having to pay more taxes than you are legally and morally required to pay, be sure to claim all available tax credits. Tax credits are available for a wide variety of circumstances and income brackets, but a few are the Earned Income Credit, the Child and Dependent Care Credit, the Health Coverage Tax Credit, and credits for homeowners, green-energy users, students, retirees, and people living in foreign countries. Conversely, it goes without saying that you must never claim more credits than you’re entitled to, not only because doing so amounts to begging for an audit, but because it’s just unethical.
1 Choosing the Wrong Filing Status
You can choose one and only one filing status when filling out your federal tax return. Flub this first step, and you’ll be on the wrong path for the entire rest of the process. Why does this matter? For one, you might not get the tax credits and deductions you deserve. This can amount to waving bye-bye to hundreds or thousands of dollars in savings. If you’re single, file as single. That much is obvious. If you’re married, you and your spouse can file either separately or jointly, but powwow with your spouse to make sure you’re both using the same status. Get this part right, and you’re already ahead of the game.