Mistakes can be costly especially when you file income tax returns. One silly but crucial mistake can delay your tax refunds. An effective way to avoid making costly tax mistakes is to use IRS-e-file. Usually, individuals who do their taxes on paper are likely to make more mistakes than e-filers. .
Check out the most common mistakes often made by the taxpayers:
1. Calculating wrong figures: Did you calculate all the figures correctly? Be careful. If you don’t add or subtract the numbers correctly, then you may end up paying more to the IRS. Calculate all the figures time and again.
2. No putting down your signature: Did you forget to put your signature on the form? If yes, then you’ve made a major mistake. Your income tax return will not be considered valid. It won’t be considered valid till it is properly signed and dated.
The sad part is, most people don’t realize this mistake until the IRS notifies them about it after a month or more than that. Too much time has already been lost. People hesitate to submit fresh income tax returns in fear of extra interests and penalties.
3. Not giving proper SSN: A lot of tax filers forget to mention proper SSN in their returns. Some people forget to mention the exact SSN of their spouse, children, and dependents. This invites trouble. The IRS won’t allow them to claim dependency exemptions or take some deductions without a proper taxpayer identification number (TIN). This affects the taxpayer’s calculations.
Fill out the form 2441 with the actual care giver’s name, contact details, TIN or SSN to claim a child or dependent care credit.
4. Giving wrong status: Many people give the wrong filing status and even wrong names. For instance, they give status as the Head of Household instead of single. This again creates a problem.
5. Not checking the account number: Check your bank account number again and again especially when you’re likely to get a refund. Mention the correct bank account number on your income tax returns. .
6. Leaving proper documents: Failure to include proper documents such as W-2s, 1099s, 1098s, 1040s can invite unwanted attention to your income tax returns. Remember, the person who gave these documents has sent these papers to the IRS too. So, it’s best to include these documents with your income tax returns.
7. Not giving a proper stamp: This is one of the main reasons why IRS recommends people to opt for the IRS-e-file. Millions of taxpayers either put an insufficient amount of postage or completely forget to put a stamp on their envelopes. Although this is not a criminal offense, yet IRS slaps a penalty on the face of the taxpayers for this mistake.
A good taxpayer is the one who files his/her income tax returns on time and without making any mistake. Cooperate with the IRS and don’t be one of those people whose returns are sent back. In return, the IRS will congratulate you by giving you a tax refund as soon as possible.
Don’t miss out: Tax laws 2016: Are you aware of these changes?