Monday, August 19, 2013

Tax filing is one of the most time consuming, difficult and hectic tasks to accomplish. Minor mistakes overlooked while filing the taxes can lead to serious complications later on. So, following proper preventive measures before filing the taxes is really important in order to stay safe and sound.

The following is a checklist of some of the most common tax filing mistakes that one should avoid while filing taxes:

1) Wrong/Missing Social Security Number:
One of the most common mistakes that a lot of people commit now a day's while filing the taxes is that they forget to mention their social security number and sometimes even put wrong social security number which in turn hinder the processing of their tax returns. The IRS will reject all the deductions/exemptions that you claimed if you forgot to mention the social security number. Moreover, they will they will hold up all the refunds you owned and may subject you to late fees also. So, it is always advised to cross check each and every social security number of yourself and your claimed dependents well, before filing the tax return. Also, match each and every digit appropriately with the digits on your social security card.

2) Failing to include Complete Sources Of Income:
Always include the appropriate documentation (W-2 forms) to support all the income that you earned over the year. Failing to include any documentation of any source of income can turn out to be misleading in the eyes of IRS and you may have to submit additional documentation or even go through an audit if required.

3) Mathematical Mistakes:
A lot of people still prefer filing their tax returns manually in order to save money. But, this may lead to the possibility of committing mathematical errors and you could find yourself paying more taxes than you would have intended to pay otherwise. IRS will charge you based upon your calculations. So, it is better to either use a calculator and cross check the calculations before finalizing it or use tax software's that can do the calculations for you and can significantly reduce the chances of errors.

4) Errors In Calculating The Credits And Deductions:
This is one of the biggest mistakes that a lot of tax filers make these days. The tax filers either claim too many or too few deductions and both of these mistakes can turn out to be harmful. Claiming illegal deductions is definitely a crime in the eyes of the IRS and can even lead you to jail in the worst scenario. But, this does not mean that you don't take the advantage of the deductions that you are entitled for legally, as this will lead you to pay larger tax liability than you need to. So, always be sure about what all tax deductions that you are eligible for and if you are unsure about any tax deduction that you might want to file then it is always advisable to take the help of a tax professional.

5) Sign And Date Related Errors:

Another common mistake committed by a lot of people is that they forget to sign and date the tax return before filing it. This can lead to certain penalties like late payment as IRS do not accept the tax returns which are not dated and signed by the concerned personnel. So, always crosscheck the whole documentation, verify each and every credential before filing. Moreover, you can file your return using E-filing that allows you to add the signature electronically and thus reduces the chances of errors.

6) Timely Filing Of your Taxes:
A lot of people file their tax return late which is perfectly legal, if you have requested an extension from the IRS. But many people skip this procedure and thus have to face penalties. So, it is always advisable to request an extension from IRS in case you will be unable to file taxes on time.

Tax filing is a long process and may take days to complete. So, never rush into things and make it a habit to cross check your return so that you can rectify the residual mistakes before filing it.


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