6 Costly Tax Filing Mistakes You Should Avoid

Getting
ready for the tax season is a challenge we can never be fully prepared for.
From delayed W-2 forms, unaccounted utility bills to unbalanced
books, all this can throw you in a haze of tax confusion. For this reason, we
have listed common tax-related mistakes you should be on the lookout for when
filing your returns in the forthcoming tax season.
1.
Incorrect personal
data
You
should ensure that you provide correct details for your family members on the
tax forms. This includes names, ages, and social security numbers.
Additionally, you should select the right social status for each. Look out for
related categories such as single and widowhood which have different benefits.
Remember, widowed house heads get favorable tax terms than singles, while
married couples pay more taxes if they jointly file their return.
2.
Providing incorrect
financial data
The
financial data you receive from the W-2, 1099, or K-1 have to be entered as
they are on your tax records. This data could be bank interests, salaries, or
investment dividends. Remember, the tax system is automated, and your data has
to match the information provided by your bank or employer. Providing wrong
information may lead to tax disputes that could deny you essential tax benefits
and refunds. If you don’t understand how to file your financial data, seeking
help from a qualified accountant NYC can be a good idea.
3.
Not targeting
maximum refund
Every
April, qualifying Americans get a tax refund, and the amount varies depending
on your tax records. The refund is an accumulation of money you earned
throughout the year, and you’ll want to claim it all. Unfortunately, if you
don’t make the correct number of tax exemption claims on your W-4, you may end
up receiving less money, or no refund at all.
4.
Missing the
deadline
With
the e-tax system, you may be tempted to procrastinate your tax filing
responsibilities until the last minute. It’s unwise to wait for the deadline
day, as unforeseen challenges such as system delays and personal commitments
can arise at any time. Note down essential deadlines on your tax calendar and
file before the deadline arrives.
5.
Not knowing your
deductions
Are
you familiar with the credits and tax deductions available to you? H&R Block reports
that at least one in every five citizens misses out on write-offs above $460
due to ignorance. According to them, many people often miss the following vital
deductions:
● School classroom supplies
● Medical expenses
● Property damage by Federally declared
disasters
● Higher education credits
● Child and dependent credits.
● Earned income credits
It’s
wise to regularly update your write-offs and acquaint yourself with all
deductions and credits available to you.
6.
Mailing your
returns
There
is no crime in filing your returns the old-school way.
However, mailing your return potentially exposes you to numerous mistakes.
Dealing with hard copy paperwork increases the chances of typos that could have
been spotted on an electronic system. Additionally, the e-filing system
automatically generates deductions and credits on your tax category, something
you don’t get on manual systems.
Endnote
Filing
taxes is cumbersome, and minor errors can lead to massive tax conflicts, missed
deductions, and refunds. You may want to consult with a tax expert if you feel
overwhelmed by the entire process.
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