Does the next tax season have you worried about making a mistake on your return? That isn’t surprising.
Tax season is a significant stressor for many people. It’s easy to make a mistake if you don’t know tax law and the common mistakes on tax returns that people make. The good news is that you can avoid these mistakes with a little care.
Keep reading to learn five tax filing mistakes that you need to know about.
- Using the Wrong Filing Status
Taxes aren’t complicated when you’re single. You’re only responsible for your own money, so there isn’t much work to figuring out how you need to file. Things change a lot once you get into a relationship.
Make sure you understand the different tax filing statuses if you’re filing with a partner. There are many deductions available to you, depending on what status you file under.
- Waiting to File
One of the most significant tax filing errors people make has nothing to do with filling out the paperwork. It’s waiting until the last minute to file their return.
It’s easy to get overwhelmed and miss the deadline when you procrastinate until the last minute. If this happens to you, then you can expect filing penalties from the IRS. Get your taxes done early, so you get your paperwork filed on time.
- Throwing Away Paperwork
If you’re like many people, you’re ready to finish your taxes and not look at them again until next year. In this situation, many people will complete their returns and toss everything into the trash once they finish. Throwing away paperwork is one of the biggest tax filing mistakes you can make.
You need to keep copies of your previous tax returns and receipts for any deductions you take. The IRS won’t tell you if they plan to put you under audit. You need to keep your paperwork in case it happens to you.
- Not Declaring Extra Income
Side hustles are common today. The internet has provided many people the chance to work online from the comfort of their own homes. Unfortunately, your taxes usually aren’t withheld from these payments.
You need to declare any extra income you make and pay any taxes associated with it. Keep track of any additional work you do so you can pay the IRS what you owe.
- Missing Tax Credits
Many people underestimate how many tax credits are available for people when they file their tax returns. If you have kids, own a home, or have student loans, you have a chance to take deductions. Your tax return will shrink if you don’t take advantage of these deductions.
Look through the standard deductions to figure out if any of them apply to you. If you’re unsure about what credits you’re eligible for, talk to a professional to get things figured out. A tax pro can also help with more than just tax credits, so make sure you check it out.
Take Care When You Prepare Your Tax Filing
The last thing you want to do is make tax filing errors and end up audited by the IRS. Avoid the tax filing mistakes above so that you can go on with your life without getting scrutinized by the IRS.
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