Filing your tax returns is easier said than done. There’s plenty of room for error when filing your tax returns. Tax mistakes may lead to huge consequences – from penalties to having the IRS reject your return. The worst-case scenario is having the IRS conduct a tax audit on you.
So, what are these tax mistakes? The following are the most common ones you need to avoid:
1. Not filing your tax returns
This is one of the biggest tax mistakes you can make. You will incur a penalty if you don’t file. If the IRS finds out that you intentionally did not file your returns, they can file a tax evasion case against you.
File your tax returns always. If you need help, contact Susan Gordon Lee, CPA.
2. Missing the tax deadline
Filing late tax returns will incur penalties already. You also need to account for interests. Most often than not, these are wasted money.
Be mindful of tax deadlines. Request for an extension if you think you won’t make it on that date.
3. Mathematical errors
You’re most likely to encounter these errors when you file your returns manually. Math mistakes can result in overstating your income or understating your deductions. Either way, you end up paying more than what you owe. The IRS can also charge you with penalties for mathematical mistakes.
Double-check, if not triple-check, the amounts in your tax return. Investing in a tax filing software can also help.
4. Wrong filing status
There are different tax filing statuses that taxpayers should choose from. These include single, head of household, married but filing separately, and married and filing jointly.
What you choose should be in line with what your status is. Each status qualifies you for certain allowable deductions.
5. Wrong or incomplete entries
When filing a tax return, you will have to answer all the questions or items on the return. Missing any entry or putting in a wrong one can ring a warning bell to the IRS. Some of these entries typically include:
- Wrong SSN. Every taxpayer has their own Social Security number. While you can definitely memorize your SSN, you might have your spouse’s or your dependents’ SSN wrong. Double check the numbers before filing.
- Incorrect income amount. The IRS receives tax forms from both employers and employees. If the amount you put does not match with that of your employer, the IRS may ask you to explain the difference or even conduct an audit.
- Wrong or no payment information. Make sure that your payment information is correct. Take note of the information so you have proof in case the IRS did not receive your payment.
6. Not signing and dating your return
The IRS will never receive an unsigned and undated return. They will treat it as an unfiled return, meaning you have to pay penalties and interests.
Professional Help is Available
CPAs and tax professionals can help you avoid these tax mistakes. With our skills and guidance, you can have peace of mind that your tax returns are what and where they should be.
Don’t hesitate to reach out to us for your accounting and tax filing needs!