Research suggests that millions of tax returns filed each year contain errors. Tax mistakes can cause you to pay more than you owe. You can end up facing penalties and interest fees. You can correct many errors after filing, but it is always better to avoid the errors in the first place. Filing an error-free, accurate return is the best way to ensure you receive a tax refund.  
 

Filing Late Tax Returns

Filing a late return is one of the most common mistakes people make. According to the IRS, about 20% of taxpayers file their returns the week before the deadline. Delay in filing leaves you with very little time to deal with any problems that may arise.
 

If you owe money, waiting until the last moment may not be a bad idea. However, if you are expecting a refund, the delay can cost you. If you owe money, you may end up paying late filing fees and other penalties as you pay estimated taxes. 
 

Missing Tax Documents

Failing to gather all tax documents before filing is a common mistake. Many taxpayers fail to collect all the documents they need to indicate their income. The documents include W-2s from employers and any 1099 forms from freelance earnings.
 

The documents you require will depend on your financial activity. They include retirement income, health savings accounts, and other investments. The IRS provides a list of tax documents for filing. 
 

Wrong Names or Social Security Number

Misspelled names and entering the wrong Social Security number are common mistakes taxpayers make. Ensure you enter your full name as it appears on your Social Security card. Misspellings and wrong numbers will cause your tax return to be rejected. If you have legally changed your name, contact the Social Security Administration to update your details before filing your returns. 
 

Incorrect Filing Status 

You file your tax returns depending on your current status. You can be Single, Married Filing Separately, Married Filing Jointly, Widow or Widower with a Dependent Child, or Head of Household. 
 

Your status will determine your eligibility for tax credits, standard deductions, and overall tax payments. You can make the proper selection using the IRS Filing Status tool. An incorrect filing status can cause you to be investigated for tax fraud. 
 

Failing to Double-check 

Many taxpayers make the mistake of failing to double-check their credits and deductions. It can potentially lead to a costly bill from the IRS. You can use tax preparation software to ensure your math adds up.
 

The programs reduce the chances of errors by walking you through your eligible tax deductions and credits. For the tax software to work and to avoid errors, you must enter the correct data. Effective software programs include TaxAct and TurboTax. 
 

Other Tax Mistakes 

Other mistakes taxpayers make include:

·      Failing to look over their returns before submitting

·      Failing to sign their returns

·      Entering the wrong adjusted gross income (AGI)

·      Making arithmetic errors with deductions or credits
 

Check to ensure your tax return is accepted after you submit it. You can get a confirmation through your accountant or an online tool. Correct tax returns ensure individuals receive tax refunds as soon as possible. Relying on a tax professional will help you avoid common mistakes. 
 

For more tax mistakes to avoid for financial success, visit Big Picture Results at our office in Vista, California. Call (619) 940-7599 to book an appointment today. 
 

Sources:

https://www.cnet.com/personal-finance/taxes/tax-mistakes-avoid-these-common-tax-errors-to-get-your-tax-refund-on-time/