The idea of getting things ready to file your taxes can be both exciting and terrifying at the same time. It is exciting because you will be able to see how much money you will get back, but at the same time, it is terrifying because you don’t want to make any mistakes on the forms.
The 2022 tax processing season is almost here, and you’re probably wondering how you’ll manage your taxes. It’s hard to remember what to do and what not to do, especially when you’re on a tight schedule. Even if you have a reliable accountant, you’ll still need to remember what your responsibilities are. This blog will look at some of the most common mistakes people make when filing their taxes.
8 Common Mistakes You Must Avoid While Filing Your Taxes
Filing your taxes can be a daunting task. There are so many numbers to deal with and so many rules to follow. But even if you’re experienced at handling your professional tax services, there’s always room for error. There are some mistakes that every taxpayer makes. In this post, we will look at the 8 most common mistakes you can avoid when filing your taxes.
- Using the Wrong Social Security Number
Believe it or not, this is one of the most common tax errors. It often happens not because their own Social Security numbers are incorrect, but rather because the Social Security numbers of their dependents or spouses were filled out in either an incorrect format or missed completely.
- Missing Every Penny of Your Income
If you received tax forms, the IRS will be receiving a copy of those same tax forms. Make sure to include all your W-2 forms as well as 1099 forms from bank accounts or investments accounts. Leaving income off your tax return will only make the IRS suspicious and they’ll want to investigate and that could potentially send you more notifications with requests for more information.
- Committing Silly Calculation Errors
Even a small error can result in IRS penalties that may cost you more than you can afford. Inversely, if you make a math mistake when reporting your company’s income or list tax deductions incorrectly, you could end up paying more tax money than required and find yourself short on cash flow at the end of the year.
- Ignoring Eligible Deductions
Be aware of how much you’re entitled to claim as well as what credits or rebates are available to you at that moment. Don’t be afraid to capitalize on all the tax deductions and credits that you qualify to use based on your unique situation, but don’t go overboard either.
- Not Signing Your Return
If you do not include a signed and dated return, the IRS cannot recognize that it is your own so it may not process your return. This could mean that your returns will be rejected, or even worse – they might get labeled as fraudulent returns. Once they realize they’ve received an unsigned copy of the form, they may question when it was filed since there is no receipt date on file.
- Missing to Include Your Payment Information
More common than not, people do forget to pay their tax bills altogether. One of how this can affect you is if you’re sending a check or money order along with your tax return but then neglect to send them along and just mail in your paperwork without them. The solution is simple! Make sure that if you are mailing a check or money order along with your tax forms it gets there without being lost or getting misplaced.
- Direct Deposition Information
When you’re getting reimbursed for business expenses why wait for a tax refund check from the government when it can be directly deposited into your bank account? Don’t let a small typo cost you valuable time and start taking some extra steps to make sure that your tax refund is properly redirected to its proper destination in your bank account.
- Overlooking the IRS Deadlines
If you are too busy or unable to put together everything you need for your taxes and have missed the deadline, it is possible to file for an extension. If you do this, be sure to consider how much time you will need weekly. Late payments will be charged penalties and interest, which can amount to wasted cash that isn’t needed!
As we approach accounting services season, millions of people will be scrambling to get their taxes filed. This year, you can avoid the stress of rushing to get your taxes done by taking a little time now to avoid some of the most common mistakes people make when doing their taxes.