Most Common Tax Mistakes People Make
Did you know that every year thousands of tax returns are rejected due to inaccuracies? These incorrect details are usually the result of carelessness, unawareness, or misinformation. As tax season is nearing, you need to make sure that you understand what must be done to avoid errors that can get your returns rejected or, worse, incur penalties and inquiries from the IRS.
To help you learn what not to do, Speedy Tax Preparation & Bookkeeping Service has listed some of the most common tax mistakes people make. As tax specialists, we’ve seen all kinds of tax mistakes and know exactly how to avoid them. With this list of mistakes explained, you will be able to make smart tax decisions.
1. Basic tax return errors
The basic mistakes aren’t necessarily with calculations but simple details like your name and other personal information. To avoid these errors, make sure your names are spelled correctly, and your Social Security number is entered correctly. You also need to use the proper filing status (for example, single, head of household, married filing joint, married filing separate).
2. Failing to enter proper information sent to the IRS
Another area where errors may be made is with the figures and financial details sent to the IRS. Make sure to enter all dividends, wages, bank interest, and other forms of income correctly. The IRS receives your financial information from employers and financial institutions. If these details don’t match the return you file, it will be rejected and slow your ability to get a timely refund.
3. Not entering information on proper lines
There are many fields to fill out in tax forms, so be sure to pay attention to each of them and enter all tax data on the proper line. Using a professional or tax software can help you cut down on errors as they will double-check all entries before filing your returns.
4. Taking the standard deduction
Itemizing taxes takes more time than using the standard deduction. But, sometimes, you can lose money by going with the standard deduction automatically. As a result, consult your tax professional before you make any deductions.
5. Not taking write-offs
You might fear that taking a deduction can trigger a dreaded audit, and you are not alone. Many self-employed people think claiming a home office deduction will result in an audit. This is probably not the case, as the IRS has created a way to take a simple deduction for a home office instead of forcing you to write off the expenses. So, if you meet the requirements for a deduction, it’s wise to take it.
6. Forgetting state healthcare mandate
For Federal Taxes, the Affordable Care Act required individuals to pay the penalty for not having healthcare coverage. That requirement was banished in 2019. Keep in mind that some states have their own health insurance mandates that require people to have health insurance coverage. For this reason, make sure you know your state’s requirements before filing your taxes.
To learn how to avoid making more mistakes like these when filing your taxes, reach out to Speedy Tax Preparation & Bookkeeping Service. We specialize in individual and personal tax preparation, C-corporation tax return preparation, S-corporation, LLC tax return preparation, bookkeeping, payroll services, and notary services for small and medium businesses and individuals. We serve clients across Elizabethtown, Salemburg, Roseboro, Clinton, Garland, Harrells, Whiteville, Lake Waccamaw, Tar Heel, Bladenboro, Atkinson, Brunswick County, and the surrounding areas.