Top Tax Mistakes
It’s tax season and many taxpayers (myself included) are taking a stab at doing it ourselves this year. Here are some common tax errors we make and how to avoid them.
The IRS website says that whether we hire a professional or we’re the DIY type, simple errors can cost a bundle. When you’re preparing your return, make sure you have the correct social security number and it’s the correct number of digits. Another mistake is entering the correct information on the wrong line and I know mathing is hard, but it’s important to watch for simple mathematical errors. Make sure your return is signed and dated as well as placed in the correct size envelope with the proper amount of postage. It’s important to take your time and double check your work.
The word of “dependent” can mean a child or a spouse, but actually, a dependent is someone who depends on you financially. For caregivers and step parents, those lines on your tax forms can get confusing and it can get even more confusing if that person depends on you, but isn’t a relative. One example is a man who supports a girlfriend and her child. Who can claim whom?
Not Filing If You Don’t Have To
It’s important to check the IRS website to determine if you need to file because there are credits and deductions you may qualify for if you meet certain income guidelines. If you’re not required, you technically don’t have to file, but it’s a good idea to file anyway because, according to one professor at Arizona State University, by not filing a tax return, many could be missing out on rebates and credits that may be in excess of the taxes they paid.
Ryan Blume, a Seattle-based accountant says that waiting until the last minute to file can be an issue because that’s when mistakes can be made. If you’re rushing, you can make a big old mess. If something happened and you need to file an extension, just ask the IRS nicely and they can help you out. I used to be afraid of filing because I was always so scared I was going to have to pay in and it was never as bad as I thought it was going to be.
If you don’t file at all, well, that can be the biggest blunder of all, so even if you’re afraid like I was, it’s better than getting into trouble and being slammed with a huge tax bill you can’t afford.