Common Mistakes When Filing Your Taxes
March 30th, 2016Few Americans look forward to filing their taxes every year. Doing your taxes can be a confusing and complicated process. In fact, the United States Tax Code is 18,500 pages long!
It's no wonder that people make mistakes on their taxes. Some of these errors can delay your tax refund or cost you money. Luckily, the most common mistakes are relatively easy to fix.
Here are some of the biggest blunders people make on their taxes:
Incorrect math
One of the most common errors the IRS sees is people adding up their numbers incorrectly. Use a calculator, or better yet, take advantage of a tax preparation software program that will do the work for you.
Math mistakes can cause a delay in your tax refund. If you owe money, you'll have to pay interest from the time that the money was due.
Entering the wrong bank account number
You can pay the IRS or receive a refund through direct deposit. This is one of the fastest and easiest ways to transfer money. But make sure to double check your information before submitting your tax return, or your money could end up in someone else's account.
Filing under the wrong status
Filing under the wrong status, such as head of household instead of single, could delay your tax refund.
Not filing on time
If you don't think you'll be able to file on time, ask for an extension. You'll have until October 15 to file, but you'll still have to pay any money you owe the IRS by April 15.
Even if you can't pay all of your taxes immediately, you should still file. You can request to pay in installments instead of all at once. Citizens who don't file their taxes on time are usually penalized with a fee of five percent of their unpaid taxes each month.
Using the wrong social security number
Make sure to fill out your tax forms with the exact numbers on your social security card. Often, if you're filing taxes for more than one person (like a spouse), you can mix up the numbers. This is an easy mistake to make, but luckily, it’s simple to prevent by being very careful.
Not reporting all your income
Failing to report all sources of income for the year could result in a fine from the IRS. Besides money earned from your regular source of employment, taxpayers need to report additional income from freelance work, and unemployment benefits.
Gambling winnings also would need to be included if you received a 1099 form from the casino. The IRS could fine you 20 percent of your unreported income if they catch this error.
Not signing your tax form
This is one of the most common errors the IRS sees. If you don't sign your tax form, the IRS can't process it. And if you have a joint return, you and your spouse will both need to sign. Double check your form, or use a tax preparation software program instead.
