The tax season is over and there are many months to go before the new tax season begins. So this is the right time to take a look back and analyze the mistakes you may have made when filing your tax return. Here’s a look at the most common mistakes people make when filing their tax return.
1: Mathematical errors
You have entered numbers on the tax return which don’t really make sense. In that case, there is every chance that your return could be audited. The IRS expected to be given a copy of all 1099 and W-2 forms that were sent to you, so that they can see if you have reported the numbers correctly. So you may have $50,000 on one W-2 and $60,000 on another W-2 form, and reported your income as $56,000. Clearly, there is a mistake and this will be noticed by the IRS.
2: Wrong Spellings
There has to be a consistency in the spellings on the tax return. So you have written “James” on one page and “Jim” on another page on the tax return, the IRS will see this as a mistake. This is a silly mistake to make.
3: Wrong bank account information
Have you entered the right bank account information? This is very important. If you want the refund to be deposited into your bank, you should enter the account number accurately. Otherwise this could raise a red flag and you may not get your refund.
4: Not reporting an income
Another common mistake people make is not to report their income accurately. This is something that can happen completely inadvertently. For example, you may have completely forgotten about the side job you did last year for a few weeks. The IRS will know about it though, and they will ask you about it.
5: Filing the wrong status
There are five different options when filing a status, of which the two most common are “single” and “married filing jointly”. One mistake you can make is to file as “single” when you have a dependent living in your house. In that case you should file under the status, "head of household."
6: Forgetting to itemize deductions
A lot of people completely forget to itemize deductions and end up claiming the standard deductions without really understanding if that’s the best option for them. If your deductions are over $6,300 as a single filer, over $12,600 as a married filing jointly or over $9,250 as head of household, it makes sense for you to itemize your deductions instead.
7: Failing to mention all charitable contributions
There are many taxpayers who donate big amount of money but fail to claim a deduction on their charitable contributions because they have completely forgotten about it or because they did not collect receipts for their donations.
Be sure not to make these mistakes the next time you file your return. Another mistake would be not signing up for cloud based tax hosting services such as ProSerie Hosting, Drake Tax Hosting, ATX Hosting, or Lacerte Hosting. We are affordable, efficient and give you an anytime, anywhere access to your tax software. Contact us to know more.