It’s that time of year again! Prepare to break out the calculator and pencils and dig out the receipts, tax forms and pay stubs.
Whether you choose to do it alone, use a tax-prep computer program or hand it over to an Accountant, prepare for tax season by reviewing our handy list of common mistakes.
1. Faulty math
Believe it or not, simple math mistakes are one of the most common errors on filed taxes. A slight miscalculation can throw off all your numbers and get you into trouble with the IRS. An online program or an Accountant can mitigate this problem, but it’s always good to triple-check the math before filing.
2. Name changes and misspellings
When preparing your taxes, you’re thinking numbers. It’s true that most of the information you’re submitting is numerical, but don’t forget to pay attention to the other details on the form.
Let the Social Security Administration know if you’ve recently changed your legal name because of a marriage or divorce. Otherwise, remember to use the correct spelling of your legal name on all your tax forms. Review every form carefully before filing to avoid frustration later.
3. Omitting extra income
Detailing your earnings from your day job is a given when preparing your taxes. Most of us even remember to include bonuses and extra commission earnings. But many people forget to include other sources of income, such as freelance work, moonlighting as a consultant and any other side work done throughout the year. If you’ve taken any side jobs, fill out a 1099-MISC and file it along with your taxes.
4. Deducting funds donated to charity
Everyone knows you can write off charitable donations as a deduction, but many people aren’t sure how to go about taking this step. Charity laws are complicated! First, only donations given to an organization with a tax-exempt status can be deducted from your taxes. Second, if you’ve donated food items or used clothing, they had to have been in decent shape to be eligible as a write-off. Finally, calculate the value of your non-monetary donations according to what they would be worth if you’d sell them now. Don’t forget to include those charity tax receipts when you file!
5. Using the most recent tax laws
When preparing your taxes, be sure to file according to the most recent laws.
6. Signing your forms
Last but not least, don’t forget to sign your name. Most signature lines will need to be dated as well.
Read through your forms before submitting them to be sure you haven’t neglected anything or made mistakes. Being careful now will help you avoid any future aggravation. And best of all, when you’re done filing, you can kiss that paper mountain goodbye!