Stay Alert. Don’t commit these 6 mistakes during tax filing process.
We all are affected by the “last minute” syndrome. Procrastination is tightly knitted into our lives, affecting our routine schedule. Why do we work at the eleventh hour? Perhaps it could be for various reasons- mix of positive and negative. But there are certain tasks that should be accorded due diligence and concentration, without any compromise. And one such task that requires your valuable time and attention is when you fill your tax forms.
Here we highlight the top 6 mistakes tax payers commit while filing tax returns.
Mistake: 1 Providing Incorrect Social Security Numbers
The greatest blunder most tax payer commits during tax filing process is by providing incorrect Social security number. In fact IRS identifies this as top most mistakes committed by many tax payers.
No longer does IRS allow tax payers to claim dependents without social security number. It has made it mandatory, that every member of the household, as specified in the return should possess Social Security Number. It is highly advisable that tax payers do multiple checks to ensure the correctness of numbers before submitting.
Mistake: 2 Spelling error in name
Sometimes a typo error can cost much. And so is the case, if your name has spelling errors in tax return form. Of course, we all do multi-tasking and are obsessed with wide range of thoughts. The resultant effect is that, we couldn’t commit our entire concentration on one single task, which leads to imperfection. This imperfection especially while filling up tax return forms, in the form of incorrect spelling will lead to rejection of returns and sometimes end up in delayed returns.
If it is so that, you are a recently married or a divorced one and haven’t registered name with concerned authority, ensure that you use your old name. The name on the form and name listed in social security records should match at any cost.
Mistake: 3 Committing math errors
Entry of correct figures during calculation process will minimize math errors. Despite the fact that, tax calculations are predominantly dependent on software, the process of feeding correct numbers into software is done by human being. No doubt, software can’t verify the correctness of numbers inputted into it.
For those calculating tax returns with the help of pen and calculator, it is highly recommended to double check the figures and results.
Mistake: 4 Forgetting to sign
Once again this is the common mistake committed by many. After spending long hours in calculating and filling up the form, and thereafter in which case if you fail to sign the papers, it will lead to lengthy delays in processing returns.
Hence it is recommended to file and sign papers electronically.
Mistake: 5 Choosing wrong filing status
Once again it is the costliest mistake which many single parents commit. In the case of unmarried parents, amongst whom those with qualifying dependent and who pay more than half the cost of keeping home would be eligible to file as a head of household. This status will increase their standard deduction by $2900. The concerned person will be called “unmarried”, as long as he/she doesn’t live with the spouse for the last six months.
Mistake: 6 Ignoring Deductions or Credits
Many at times we tend to ignore the deductions and credits that we are entitled for. Maximizing tax refund depends much on how we take advantage of every tax deduction and credit available to us. Of course there are plenty of deductions available, through which one can reduce the tax liability amount.
Here are the list of tax deductions and credits one can utilize to reduce the tax liability
American Opportunity Credit: College students of all ages are eligible for avail this credit option. The amount of credit depends upon the college expenses and one can save up to $2500 tax reduction per year for a four year period.
Earned Income Tax Credit: Low income families are entitled to avail this credit option. Under this credit scheme government will pay cash to the families, even at instances when families don’t owe any taxes. The credit can be up to $6044 for some families.
Child care credit: If parents have put their children under the care of someone else, when they are to work, they will be eligible to claim a credit of up to $1000 on expenses incurred.
State Income or Sales Tax: One can deduct any state income tax paid from one’s federal return. If the state doesn’t charge income tax, one can claim for the paid sales tax.
IRA contributions: Contributions to both IRA’s are not deductible. However one can deduct up to $5500, if the money has been used in traditional IRA.
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