Doing taxes can be stressful.
Let’s face it, those of us who didn’t choose accountancy often feel unprepared and stressed when it comes to filing our tax returns every year. This leads to a few common errors and mistakes made by thousands of us every single year.
It can be very tempting to rush through your tax return in an effort to get it done ASAP, but this leads to more compounded errors. So, take your time, and work through these issues below making sure you’ve completed everything. Avoid these simple mistakes and your tax return will be filed and you will be stress-free once again.
This may seem simple, but we’ve got to say it: make sure you file your tax return on time. The due date in the United States is the same every year; April 15th. You have an entire year, every year, to plan for your taxes. It doesn’t sneak up on you or change the date every time. Now, we all get busy, that much is true, but there is always time to at least get started on your tax return. The professionals behind Tax Shark recommend starting early with tax planning. Whether that’s organizing paperwork, saving monthly, or reaching out to an advisor. Doing one, or all, of these things can help you in not being surprised when the deadline comes.
You can also request extensions to file, varying from a few days up to six months. However, this does not make you exempt from paying any of the taxes due, and you can still be charged. It just gives you more time to finalize your paperwork.
Finding something wrong with your documents can really set you back when it comes to time. A lot of errors on tax returns come from simple math mistakes. Small errors in math can compound into bigger and bigger errors throughout the process which could lead to you wildly over or underpaying your taxes. Obviously, this can lead to trouble further down the line. If you are confident of going it alone, we recommend double and triple-checking every calculation along the way. Then, go back over it once again for good measure! Failing that, there are now tons of great apps and software tools aimed at helping individuals accurately file their taxes, so it may be worth considering one of these.
Again, simple, but could lead to all sorts of trouble. You need to triple-check those personal details. The IRS doesn’t take kindly to incorrect data on tax paperwork, that’s for sure. For example, they usually have to contact thousands of people a year who have entered the wrong social security number for themselves or one of their dependents on their forms. Most of us have this info memorized, but we still recommend checking once again after completing your paperwork!
This also includes checking your banking, address, and direct deposit information. If you owe money – or worse, are owed money – you need to make sure your bank details are correct so you can get it sorted. The last thing you need is to enter the wrong account number and have money sent to someone else, right!?
Even if you’ve just forgotten one small payment, the IRS could view this as a sneaky move to try and underpay tax. You must ensure that every payment received and sent that is taxable has been declared on your returns. If anything is missing – and is then noticed – you may find yourself subject to full investigation. Make sure you check every category such as capital gains tax and estate tax to ensure every dime is accounted for. If you need any help, reach out to a trusted tax advisor.
There are all sorts of credits and tax deductions available to us, and sometimes it can be hard to know which ones are appropriate for you. Every year, many taxpayers under or overclaim for tax credits, deductions, and rebates. This causes delays in filing and can cause issues with over or underpayments. You should definitely claim every credit you are eligible for, just make sure you research properly and don’t over claim.
Avoiding these common mistakes may seem like a lot, but if you work methodically and slowly we assure you, you will get your tax sorted properly. There are many advisors, apps, and tools available on top of these tips, should you need further advice. Remember, get started now, don’t wait until April 14!