Common Mistakes When Filing Income Taxes
These days, with the help of tax preparation software, it is easier to file annual tax returns. However, you should take note that with just a single mistake in putting in your information in filing up on a software it may end up costing you, either in the form of a larger tax bill or a smaller refund. Additionally, even when the mistake, either on your PC or paper forms, did not cost you any money, it could delay the receipt of any refund you’re expecting.
Another crucial factor that you need to remember, is that any changes in your taxes can also make the annual tax-filing exercise even more confusing. For example, in the reporting and filing of requirements prompted by the Affordable Care Act have produced a numerous problems for taxpayers, tax professionals, as well as, the IRS. Whether or not are there are special taxes to be applied in the current year, there are still plenty of incidents that you may accidentally mess up a 1040 form.
Every year, the most common error that occurs on tax returns are incorrect math. Even a single error in your arithmetic or in moving figures from one schedule to another will get you an instant correction warning. Be warned, even the most simple math mistakes also can lessen your tax refund or result in you owing more taxes than you thought. Your most important job is to get all the numbers correct since the IRS will be doing a double-check all of the numerical entries against its copies of your tax statements (W-2, 1099s and the like).
Another common math error are computation errors, here taxpayers or their tax pros make mistakes in figuring such tax-return entries as taxable income, withholding and estimated tax payments. In addition, credits and special deductions also pose problems.
One important thing you need to recall, the IRS is not just all about numbers, but words too, especially correct names. If case the names of a taxpayer, his or her spouse, or even their kids don’t match with the tax identification number that the Social Security Administration will provide it may start different problems with the processing. This issue often is a problem for new wives. This is why women should announce to the Social Security Administration as soon as she can when she got married and will be changing surnames.
Additional Income Means Additional Filing Work
If you have any side job, for example, as a contractor you will most likely receive a Form 1099-MISC detailing the extra earnings. You should never miss out on declaring these important details or the IRS will count this against your owed taxes. There are many other tax problems that you will bump into, it is crucial that you know how to amend them to avoid problems.
Source: online tax return