Tax Errors to Avoid
- April 1, 2017
- By: Greenpath Financial Wellness
You have filed your taxes and are counting the days until you receive your return. Weeks go by and soon you start to worry. Why is it taking so long? There is a possibility your return contained errors, which will delay your return.
There are so many variables to a tax return — income, deductions, tax brackets, dependents, etc. This amount of complication is why many people opt to have their taxes prepared by a professional. Here are some tax errors to avoid:
- Incorrect filing status.
- Social Security number(s) incorrect, missing or doesn’t match name(s).
- Incorrect or missing forms and schedules.
- Return not signed.
- Claiming ineligible dependents.
- Failing to claim credits (Child Tax Credit, Earned Income Credit, etc.) or figuring credits incorrectly.
- Failure to report and pay domestic payroll taxes (if you are employing a maid, in-home caregiver, nanny, etc.)
- Forgetting to claim income that’s not included on a Form W-2, Form 1099 or other return.
- Failing to figure out whether or not you’re liable for the Alternative Minimum Tax (AMT).
- Entering the wrong amount of taxable Social Security benefits.
- Mailing your return to the wrong address.
- Math errors.
- Standard deduction used when itemizing is more advantageous. The government estimates that more than 500,000 taxpayers using the EZ form could save money by itemizing.
Tax Errors Can Be Avoided
Double-check your numbers. It’s easy to make mistakes with numbers. You could make a calculation error, transpose a number ($54 vs. $45), or accidentally add or subtract a digit ($789 vs. $89). Double-check your work to be safe
Watch for missing or incorrect information. Make sure you sign your return and that your Social Security number is legible. If you want your return to be direct deposited into your bank account, be sure your banking information is accurate.
Don’t miss the deadline. April 15th is the deadline every year. If you do not file by this date, you will have to pay interest and fees. The IRS charges interest from the date it is due until the time it is paid off and will tack on a late filing fee as well. If you need to file a six-month extension, you have to file for it before April 15th.
Claim all your tax deductions. Do you know what purchases can be claimed on your taxes and which ones cannot? These guidelines can change from year to year, so it’s important to understand the rules.
File the correct forms. The forms can be confusing because there are often similar names for completely different forms (1040, 1040A, 1040EZ). Filing an incorrect form can delay the processing of your claim, or possibly cause you to miss out on potential tax breaks.
File even if you can’t afford to pay. If you know that you will owe the government money and can’t afford to pay them, you still want to file a tax return. Missing the deadline will result in additional penalties and interest charges.
For more information, visit the IRS at www.irs.gov or talk to a tax professional.