Is it time to file your taxes? It is a task that only a few people enjoy out there. The preparation of your taxes needs in-depth paperwork along with careful math, accounting, and current knowledge of the tax laws. While many people would try to complete the respective taxes all by themselves, it is not always regarded as the best idea.
When you are preparing your own tax, the chances are that you might end up making some major mistakes. However, the occurrence of even the smallest mistakes could lead to serious issues. It might even lead to the IRS opening the audit and examining every specific detail of the finances.
When you wish to avoid problems with the taxes, you would like to exercise extra carefulness with respect to filing returns. For the current tax season, our experts can help you to understand some of the common mistakes that you should avoid for the best outcomes. Here are some:
- Miscalculations: Mathematical errors or miscalculations could be one of the most common mistakes performed as a taxpayer. There are several people every year who enter the stage of auditing due to common mathematical miscalculations. When the numbers or figures on your tax files are not correct or have not been added properly, the chances are higher that the IRS would take note of the same.
- For reducing the overall mathematical errors, you can make use of an advanced software solution for filing the respective returns. Otherwise, you might even consider hiring an accountant to do the job correctly for you.
- Not Using the Right Tax Form: The preparation of the tax return might seem like a complex math work. However, by choosing the wrong paperwork or tax form altogether, it might become a complete nightmare. It is important to realize that tax laws keep changing from time to time. If you are not aware of the ongoing changes, you might end up filling up the wrong tax form.
- If you wish to avoid this highly common, yet serious mistake, you can consider making use of some advanced tax preparation software solution. The given software solutions or programs are updated from time to time to ensure that they are providing access to the latest and the most updated forms out there. You can also consider working with an experienced professional if you are unsure of which tax form is of the latest version.
- Using Incorrect Names or Misspellings: It is a common, yet major mistake during tax filing. Most people out there tend to misspell their names or common words in the tax form. Moreover, it is also a highly common experience for individuals to file the tax form using some incorrect name. In case you have changed your last name after your marriage, then you would be required to double-check the respective tax information. It is important to note that your name, as well as SSN (Social Security Number), matches each other.
- At the same time, you would also like to re-check that you have spelled the names and other details in the tax form correctly. If you end up writing up the wrong spelling –even by a few letters, it could lead to the overall delay in the tax filing process by the IRS.
- Not Adding Extra Income: Were you able to make some extra income in addition to your regular job during the last financial year? In case you were able to achieve the same, you should fill out the form 1099 – also referred to as the Form 1099-MISC, Form 1099-DIV, or Form 1099-INT. in the given form, you are required to specify the exact information of the additional income that you might have during the given financial year. While preparing the taxes, it is important to remember to include this additional income.
- When you are sent 1099 regarding your additional income, the IRS also becomes notified of the additional earnings that you make. Therefore, if you end up avoiding this vital information in the tax files or forms, you might have to face penalties from the IRS for hiding such information.
- Missing the Deadline: In most cases, the deadline for filing the tax is around 15th April. However, there are several Americans out there who receive special extensions to file the tax during October. However, whatever might be the case, you should never miss the deadline. By doing so, you will only end up attracting penalties or increased interest rates.
Ensure that you file your taxes effectively.
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- “7 Mistakes to Avoid This Tax Season,” Landmark Tax Group,
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- “3 Common Mistakes You Don’t Want To Make This Tax Season,” Forbes, Eric Carter, 3 February 2019,