People make mistakes while filing taxes all the time. And it’s understandable given the fact that there are so many forms to fill and the rules keep changing almost every year. Even the smallest errors in tax-filing can cause you to lose money, either by losing out on credit or due to interest/penalties levied due to misfiling. Therefore, the next time you’re doing your taxes, make sure to avoid these following mistakes.
Getting the Numbers Wrong
It’s not hard to go wrong with data entries when filing taxes. When submitting paper forms, you could easily make errors with arithmetic calculations or add/subtract the wrong lines together. If you use online tax software, the chance of mistakes is reduced, but you need to be careful nonetheless. Therefore, always file your taxes when you have the time to be thorough and meticulous. Cross check your entries and calculations at least twice and if the result doesn’t match in both attempts, undertake the entire activity again. Do not get lazy when it comes to tax-filing; it could cost you a lot of money.
Leaving Out Information
Admittedly, unless you’re a professional accountant or incredibly experienced with tax-filing, the forms you need to fill are long and tedious for sure. In fact, a lot of accidental slippages occur, and people end up missing out providing vital information in a lot of cases. There are numerous places you have to put your signature too, and could mistakenly skip any of these easily too. And the worst part is, if you submit a form without any of these vital details, the IRS will not sanction your tax return, and your file processing may get delayed or even rejected altogether. So cross-check with someone to ensure you’ve filled in all the blanks!
Sometimes people make wrong entries while filing taxes and not entirely unwittingly. The temptation of misreporting earnings to save money may be present, or you may not be sure how to file taxes in the first place yet go ahead in any case. Do not indulge in such acts for it may end up costing you in the long run. Make correct entries in the correct spaces and make sure all other vital information – name, address, bank account details, etc. – are all in order too. Wrong contact information may lead to returns that never reach you.
Improper Credits and Deductions
Tax laws change every year, and so do your life circumstances. For instance, you may be unmarried one year but become eligible for numerous kinds of tax breaks due to marriage the next year. You may buy a house, enroll a kid at school, so on and so forth. Such changes may set you up for credits and tax leniency, but you need to be aware of these. So, study the tax laws each year to determine what kinds of tax breaks you could file for. Over the years, this will really add to your savings.
No Status Update
Your marital status changing does not simply change your credits and deductions. If you go from being married to divorced, your status as a tax filer changes too. Changing your filing status will also change the specifics of claims, which vary from case to case. If you’re not too clued up on such details, consult an accountant who can explain it all to you. Do not, however, file taxes without updating your status – it could cause you many inconveniences in the future.