Steering Clear of Penalties: Avoid These 7 Tax Preparation Mistakes as if Your Life Depended on It
Every year, many people look towards the middle of April with dread, as spring flowers also bring with them tax season. Paying your taxes can be a confusing muddle, which is why so many people rely on professionals so that no costly errors are made. Local tax preparers are always kept busy at this time of year, but regardless of whether you decided to use their services or you are going to try and file yourself, here are some mistakes that you will want to avoid at all costs unless you want to incur penalties or the dreaded audit.
Forms Not Dated Or Signed
Just like a check that is unsigned, a tax return form that is not signed and dated is not valid. Be sure that whether you are sending in your forms through the mail or whether you are sending them to the IRS online, you sign wherever it is appropriate.
The Wrong Bank Account Numbers
Receiving your refund by direct deposit is the safest and most efficient way to get it done. Of course, you also need to be sure that the bank information you are sending the IRS is accurate, and that includes the correct bank name and account number. Before you attempt to e-file and direct deposit, double and triple-check those numbers.
Deduction and Credit Errors
Some people make honest mistakes in this area, but there is no better way to get yourself audited. The places that people are most common to err are in the taking of the standard deduction, claiming the Child and Dependent care credit, and with the Earned Income Tax Credit. If you’re not sure about any of those, consult with a tax professional.
Double check all the math on your forms. You should use a calculator even if you’re sharp with mental sums. If you’re filing online, then there is tax preparation software that does all the addition and subtraction for you. Take advantage of it.
Errors In Filing Status
Another common blunder comes in the form of using the wrong filing status. If you are the Head of the Household, your filing status should reflect that. If you’re Single, you should put that instead. On IRS.gov there is an Interactive Tax Assistant that can help you if you have any questions in this area. The tax software supplied by e-filing can fill you in with further details.
If your name, that of your spouse, or another household member is spelled wrong, that’s going to lead to problems. Your names should match those on your social security cards.
Social Security Numbers
The IRS cannot correctly identify you if you get your social security number wrong. Check that what is on your card matches what is on the tax return form.
If you are at all unsure about anything on your tax return and you are trying to do it yourself, contact the IRS or a tax professional. Even if you are not audited, a mistake could mean that your refund is delayed, and if you are counting on it to pay some bills or for some other purpose that’s something you want to avoid.