Preparing taxes can be fun, if you are aware of the tax law and the changes that have recently been introduced. In case, you don’t have any knowledge about the tax law, seek a professional help and expert advice allows you to file an error-free return which is very much required if you really want to stay away from any IRS’ mess. A 100% correct filing of taxes means you can concentrate on your business or job without caring about IRS’ notices for audit or any other correspondence. If you want to enjoy such freedom, try not to commit the following errors.
It is one of the most common errors made by the taxpayers. There could be several reasons for committing calculation mistakes. You might be tensed with the mess of documents, long calculations and deducting IRS relief correctly. Once you’ve calculated your taxes, you should recheck it to make sure calculation is 100% correct.
Computing your taxes is another major area where taxpayers tend to make mistakes. While computing taxes, you should compute both taxable income and adjusted gross income and recheck them to ensure no errors have been made. In most of the cases, payments and credits get computed incorrectly. Therefore, extra attention is required for earned income credit, education credit, dependent credit and estimated tax payments.
Generally taxpayers file wrong filing status while preparing taxes and this happens especially with those who don’t have knowledge about the tax law. If you have hired a professional he/she will let you know about the status which you should use to file your taxes. If you are married and filing taxes separately, you should not choose the status of Head of household rather file your tax return under Married Filing separate. In case, you qualify for two or three filing statuses, pick the one that allows you to file lowest tax.
Social Security Numbers
If you are availing some tax credits such as education credit or dependent credit, you should not miss out on writing the SSN of your kids or spouse (whichever required). Make sure you are writing correct SSNs. Your filing will not be accepted if you don’t mention SSN or mention it correctly. Moreover, IRS will charge a penalty on you as well.
Omitting Forms, Income or Schedules
Don’t try to act smart with IRS! If you are trying to save money by not reporting your income or not submitting form which is required to declare your income, you are more likely to find your name in the hit list of the IRS. Your return will not be processed until you submit the required forms. If you can’t submit the form in time late fees, interest and penalty will be added to the remaining amount.
IRS expects that every taxpayer files his/her tax return in time. However, if you are unable to file in time don’t forget to appeal for an extension. It allows you to buy time to file your taxes beyond the final date of filing tax return.