Everyone makes mistakes, but a tax return mistake could cost you hundreds or even thousands of dollars.
With so many forms and fields to fill out, it can be easy to make an expensive tax filing error.
But many people repeat the same common mistakes, only to regret them later. Before you make a tax return mistake, look to these eight common errors and learn what to do instead.
1. Choosing the Wrong Filing Status
Choosing an incorrect filing status is a common tax filing error, but it’s also an easily avoidable one.
Your filing status options are:
- Married filing jointly
- Married filing separately
- Head of household
- Widow(er) with dependent child
Select a status based on your family and household conditions as of December 31.
2. Deduction Mistakes
With numerous deductions and credits to choose from, it’s easy to become overwhelmed.
Spend plenty of time reading about different deductions and making any calculations necessary. If needed, consult a tax professional for help.
3. Messing Up Your Social Security Number
Forgetting to write your social security number or entering the wrong number can cause major delays in your tax returns.
Double-check all social security numbers, including those of your spouse and dependents, before submitting your forms.
4. Not Including All Income Sources
One of the costliest mistakes on taxes is failing to include all income sources. If you don’t calculate income from gifts, freelance work, and other sources, you may face hefty fees later.
Learn more about filing penalties.
5. Handwritten Errors
If you’re filing paper forms and not electronically, you run the risk of submitting handwritten errors or illegible writing.
Have someone you trust to read over your documents to make sure they can be easily read and understood.
6. Filing Too Late
One of the most common mistakes in filing an income tax return is waiting until the last minute to file. In fact, one out of three Americans wait until it’s almost too late to do their taxes.
Missing the tax filing deadline may lead to a penalty, but filing right before the deadline is almost just as bad.
Give yourself plenty of time to avoid rushing and making mistakes.
7. Forgetting to Sign and Date Documents
You’ve gathered all your information and took your time inputting it into your tax forms.
Then, you send off your forms, only to realize you forgot to sign them once it’s already too late.
Don’t make this simple mistake. Check your forms in their entirety before submitting them.
8. Not Making Copies
Always save a copy of your tax documents for yourself.
Not only will they come in handy during the next tax season, but you may also need them if the IRS requests an amendment or accuses you of incorrect information.
Avoid Making a Costly Tax Return Mistake
Just one tax return mistake could cost you money, time, and your sanity.
Avoid these common tax errors, and survive this year’s tax season without the headache.
If you’re filing taxes for your business, be sure to read our other business articles for more advice and ways to earn money!