Most Common Mistakes on Taxes
Tax season is one of the least enjoyable times of year for many taxpayers, and neglecting to pay attention to details can end up making taxes even more costly. There are several common tax blunders and pitfalls that often cause taxpayers to incur fees or miss out on potential savings.
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Factual Errors
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Simple factual errors are some of the most important and common types of errors in found in tax returns. According to the IRS, an incorrect or missing Social Security number is one of the most common tax filing errors. The IRS uses Social Security numbers to keep track of tax records and associate you with your earned Social Security benefits. Misspelled names, bad addresses and other small errors are common. It is important to double-check all the information on a tax return to ensure that there are no obvious mistakes.
Calculation Errors
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Filing taxes requires following a detailed set of instructions that tell you how to list various sources of income and expenses on specific lines of tax forms and add and subtract values to figure how much tax you owe or the size of your refund. Mistakes in calculations, or writing numbers on the wrong lines, which can lead to faulty calculations, are common errors. All calculations and information fields should be double-checked to ensure accuracy. Use a calculator to confirm the accuracy of basic arithmetic.
Filing Late
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Procrastination is a common tax pitfall. Waiting until the last minute to file taxes can make it more difficult to make the filing deadline, since tax filing professionals will be busier and tax filing websites will be swamped with traffic, which can result in sluggish performance. Failing to meet the filing deadline of April 15th can result in late filing fees and may lengthen the amount of time it takes to receive your refund.
Failing to Report Income
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The federal government requires the reporting of many types of income, even income earned from side jobs, independent contracting and unearned interest income. Any income that you earn that does not have taxes withheld by an employer, such as self-employment income, must be reported. Self-employed workers are required to make estimated tax payments on a quarterly basis through the tax year. Failure to make the appropriate estimated payments can result in penalties. Intentionally failing to report income is known as tax evasion. Failure to report income may result in an audit, financial penalties or even jail time.
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