Things to Avoid When Doing Your Own Taxes
Filing tax returns is a legal requirement that all businesses and individuals must undertake. Failing to file tax returns has consequences, which may come in the form of fines or other penalties. Likewise, late filling and providing wrong information also have negative consequences.
Here are the six things you need to avoid when doing your taxes.
Different or Misspelled Names
Tax filing is not just about numbers, but it is also about words. If the names you fill don’t match those on the records of SSA, Social Security Administration, or tax identification number, the IRS will slow down the processing of your form, or the IRS may reject your return. When filling the tax return for, check, double-check the spelling of your names and ensure they are correct. Also, check the names of your children and that of your spouse.
If you are a newly married woman who has just changed her name, alert the SSA of the name change so you’ll have no problem filing your tax returns.
Issing The Tax Filing Deadline
Millions of taxpayers wait until the last minute, then rush to fill their taxes. There’s no problem with that, provided you do it before the deadline elapses.
However, doing things last minute may cause several errors. And you never know, something may happen that prevents you from filling the returns or even filling Form 4868 to ask for an extension.
If you cannot file your tax on time, you’ll face non-filing and late-filing penalties. To have your taxes filed in time, you can hire tax consultants to do the work.
In filing your taxes, be very careful with your math calculations. Making arithmetic errors or transferring figures wrongly will cause a wrong tax outstanding value. You may end up paying more than you owe, or your tax refund value can be less than it should be.
Using tax filling software can reduce these errors because they have built-in calculators that will perform the additions, subtractions, and multiplications. However, you still must enter the correct figure when filling the tax return form.
Failing to Include Additional Income
Did you do some side jobs in the year? If you did, then you must have received Form 1099-MISC, which details your extra earnings. Again, if you had a new saving or investment account in the year, you must have the Form 1099-DIV and Form 1099-INT statements. You may not know about this, but the IRS already knows how much extra income you made in the year. This is because the firms you dealt with already sent copies of your form 1099 to IRS.
If you don’t include these extra incomes in your tax returns, IRS will let you know and tell you the amount you owe. If the IRS discovers the oversight late, you may owe interest and penalties on the earnings you failed to report.
Computation errors are more or less like arithmetic errors. You may not figure out the correct values for tax payment estimates, withholding tax, taxable income, and other tax parameters.
You may also have problems with special deductions and credits. For example, errors may arise in determining your Social Security benefits, income credit, or calculating deductions. Most of these computation errors may cause you problems with the Internal Revenue Service (IRS). But if you’ve realized you made some errors, don’t panic. You can seek tax resolution services from experts to deal with the problems raised by the IRS.
Failing to Sign Your Tax Return
Signing may look like a simple matter, but if you don’t date and sign your return, it won’t get processed by the IRS. Even e-filed forms must be signed. If you are filing electronically, you must sign your return using your PIN.
To have peace of mind, ensure your tax return is filed correctly and in time. Also, remember to keep a copy of your signed return together with a copy of proof of tax filing. Keeping the proof of tax return will protect you against any claims made by the IRS that you never filed or filed late. Remember, any slight mistake when filing your tax returns can put you in trouble with the authorities. Always be careful.