Welcome to the topic Avoid Common Tax Mistakes-With IRS.
Tax preparation may be a problematic and perplexing process.
Although it may feel like you should hurry to finish the time-consuming chore of filing taxes as soon as possible, take the necessary time to avoid these typical tax filing errors.
Falling for even one of them might cost you a lot of money, or worse, raise your chances of being audited by the Internal Revenue Service (IRS).
Taxes are complicated enough. Prevent making these typical blunders to avoid having to repeat them again. Some minutes spent now could save you hours and possibly thousands of dollars afterward.
Therefore, this blog will talk about some of the common tax mistakes we’ve seen taxpayers make and provide you with enough information and clarity for you to avoid making them.
Common Tax Mistakes
1. Missing Out Income
If you got tax forms from your company, the IRS should have received a copy as well.
Include all of your W-2 forms, as well as any 1099 papers from your bank or investment accounts. Having left income out of your tax return is a surefire method to give the IRS the impression that you’re trying to hide money.
If you do so, they may scrutinize certain aspects of your tax return or perhaps request a complete audit.
2. Incorrect Social Security Number
Could you imagine that the IRS receives countless tax returns each year with either the incorrect or no Social Security number attached?
Strangely, this is among the most common mistakes people make when it comes to taxes.
It would be best if you had your own phone number remembered, but mistakes with your spouse’s or dependents’ numbers might also happen.
Make sure to double and even triple-check this number before filing it in.
3. Mathematical Errors
While filing your taxes, making use of a tax professional or tax software should help you avoid many math errors. Despite this, many taxpayers continue to file their forms by hand. Use a calculator or tax software to double-check your math.
You could face IRS penalties even if you make a little mistake. On the other hand, if you make a math error and overstate your income or understate your deductions, you may find yourself overpaying taxes.
Use tax filing software or even double and recheck your math. It is reasonably priced and should assist you in avoiding errors and reducing tax filing stress.
4. Failure To Include Payment Details
If you’re sending a check or money order with your tax return, double-check that it was received.
On the check, don’t forget to write your name and Social Security number, as well as the tax bill to which the payment should be paid.
You can make payments electronically if you e-file. This way, you won’t have to rely on the mail courier. Make sure you input the correct bank details in order for the payments to go through.
5. Not Filing On Time
According to the IRS, 20% of taxpayers delay until the week before the deadline to file their tax returns.
However, waiting until the last minute may compel some slackers to miss the deadline if they encounter any difficulties while filling out their applications.
You should request an extension in advance if you wish to file your taxes late. We’re all busy, so the last thing we want to bother with is taxes.
While requesting an extension gives you extra time, you must still pay any taxes due by the original deadline.
Failure to file for an extension, on the other hand, will almost always result in additional expenses once you are ready to file. The IRS will charge you interest if you do not make your payments by the due date.
6. Tax Deductions And Credits
Among the most common mistakes a taxpayer can make claiming too many or too few credits and deductions.
Annually, a large number of taxpayers try to claim tax credits or rebates that they are not entitled to.
That said, don’t be hesitant to take advantage of all of the tax breaks and credits available to you.
Although the Internal Revenue Service isn’t known for being kind, there are a variety of tax credits and exemptions available to families and students.
Remember to consider all of your options before opting for the standard deduction. Itemize your greatest deductions, especially if you own a home, to see if they sum up to more than the standard deduction.
Ignoring or failing to mention these eligible tax breaks is only making you lose out on money you could get back.
7. Wrong Filing Status
What is the best tax filing status for you?
Are you the head of household, single, married but filing separately, married but filing jointly, or married but filing separately?
It can be difficult to determine the correct status. If you choose the incorrect one, your tax figures will be thrown off.
Do not try to save money by claiming a status for which you are ineligible in order to reduce your taxes.
8. Forgetting To Sign And Date Your Return
You put forth the effort to keep track of every single tax deduction. After that, you stress over filling out each line of your tax forms. After that, you mail your tax return to the IRS, but you fail to sign and date it.
The Internal Revenue Service will not accept tax returns that are not signed and dated. It will be treated as if it hasn’t been submitted at all if it doesn’t have a signature and a date.
Your return may be deemed late once you notice your error, which could result in you having to pay IRS fines and interest.
9. Remember To Keep Copies
Make copies of your signed return and save a record of your proof of filing.
Proof of filing is an acknowledgment that the IRS has received your e-filed return or a certified receipt for a paper return sent by mail.
This documentation will shield you from IRS accusations that you filed late or not at all. Additionally, the details on this return will assist you in preparing your return for the following year.
Conclusion
Avoiding these common tax mistakes are essential to your overall income tax return. And although amending your tax returns (Form 1040-X) are not the worst thing, it certainly can be avoided in most cases.
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