Every year, many people make huge mistakes with their taxes and they don’t even realize it. Some people just miss out on a nice refund, but others actually get into tax debt with the IRS and need help getting tax relief. As tax season slowly approaches, it helps to be aware of the most common tax mistakes so you can avoid them. Here’s what you should be sure not to do as you file your taxes this year.
Math Errors and Typos
This may seem like a no-brainer, but you should double-check or even triple-check your math to make sure that it is correct. Many people make simple mistakes when adding or subtracting that can lead to major errors, causing them to owe money that they shouldn’t or have other serious issues. It is very important to take your time when filling out your return, and check all of your math with a calculator multiple times. You may even want to have another family member or friend look over your return while you’re filling it out, just to see if there are any small mistakes that you missed.
Entering the Wrong Bank Account
Once you’ve completed your tax return online, you’ll need to enter a bank account to send your refund to. However, if you enter the account number wrong, there’s a risk that you could not get your refund back at all. This is particularly common for people who choose to split their refund up between multiple bank accounts, because the margin for error is much higher.
Choosing the Wrong Filing Status
This is another mistake that can be extremely problematic. There are five different filing options, ie. single, head of household, married filing jointly, etc. Each filing status has a different effect on your tax return, and choosing the wrong one can result in losing money or even getting in trouble with the IRS. If you aren’t sure exactly what filing status to choose, consider talking to a tax consultant to help you decide.
Not Keeping Your Receipts
Many people don’t realize just how many tax deductions they can make, and therefore don’t save the documentation they need to file them. Even if you aren’t sure if you can deduct something from your taxes, it helps to save all of your receipts for work-related purchases just in case. You’ll be thankful you did when you get a huge return back!
Forgetting to Enter All Sources of Income
Most people don’t earn all of their income from just one source, they may earn some of it from a side or freelance project as well. They also may earn money from investing or renting out property. If one of these situations apply to you, it is important to report all of your income on your tax return. Failing to do so can be very detrimental to your tax situation, as you will likely end up owing money to the IRS and having to pay taxes on them later. If you need help with back taxes from previous years, one of the most important things to do is to ensure that your taxes from this year are completely squared away as well.
Ultimately, the best way to avoid these mistakes is to just check your tax return carefully and ensure that you get the answers to any questions that you have before submitting.