April probably is not too many people’s favorite month. April 15th definitely is not anyone’s favorite day. Do not tell me about your aunt and her April 15th birthday. She still hates it, I promise. If for no other reason than everyone around her is miserable… The reason, of course, is that so many people save their IRS tax return preparation until the last possible moment -- and this is not only stressful, it can result in plenty of costly errors. I will take you through some of the most common tax mistakes that people commit. If you can manage to avoid them, the entire month of April might just make it out of your doghouse.
Common IRS Tax Return Mistakes
1) Typos. Misspellings or mistyped/inaccurate information such as incorrect social security numbers or addresses will absolutely cause a hold-up in processing your return. On this tip, the worst error you can make is to transpose digits when writing dollar amounts e.g. writing $35,903 instead of $39,503. You can lose major cash or royally tick off the IRS with this kind of mistake.
2) Opting for the standard deduction. With a few notable exceptions, it is generally better to itemize your deductions. This will usually save you a decent amount of money, truth be told. According to the Government Accountability Office, there are actually more than two million taxpayers who do not itemize their taxes and end up overpaying because of it.
3) Overlooking deductions. It is an easy mistake to make, of course. When you itemize your deductions, make absolutely sure you exhaust all possible deductions. Spend a little extra time on it is worth your while. Taxpayers tend to overlook such things as charitable contributions, medical expenses, gambling losses (I kid you not), traveling expenses, clean-fuel deduction, education expenses, and job expenses that their employers don’t reimburse them for like uniform and dry cleaner expenses if your employer requires these items. You can even deduct your tax preparation expenses, believe it or not.
4) Bad math. The IRS reports that basic arithmetic errors rank as the number-one mistake taxpayers make, year in and year out. Sometimes, these screw-ups involve nothing but the most elementary addition and subtraction flubs. One excellent way to avoid math errors is by using tax preparation software.
5) Forgetting necessary documents. Do not forget to attach all essential wage statements to your tax return. W-2 and/or 1099 forms from all employers are absolutely, positively necessary.
6) Missing the deadline. Remember that April 15th stuff I was mentioning earlier? It seems impossible to many of us, but many taxpayers still miss that well-publicized deadline. If you do not have enough money to pay your taxes or cannot make the deadline for any reason, file an extension instead. Do not get saddled with that late penalty.
7) Forgetting about taxes the rest of the year. Keep your taxes in mind every month of the year. It is a hassle, for sure, but making records of those little tax-deductible things that pop up on a daily basis will save you a lot of cash in the long run. Be certain to keep documents, receipts, and bills from the whole year if you want to get the most out of your itemized deductions. It will also save a lot of time if you put these receipts in different files so that you do not have to sort them at the end of the year.
If you have committed any errors on your tax return, remember that you can correct them even after you have filed the return. You will need to file the Form 1040X, which allows you to make revisions. You can, of course, minimize tax mistakes by hiring a tax professional. Heck, you can deduct the cost -- right?
Written by the GetPreQualified.com Editorial Staffwriter. This Article is designed to be of general interest and should not be considered legal advice. The specific information discussed may not apply to you. Before acting on any matter contained herein, you should consult with your personal legal adviser.
