11 Common Tax Mistakes People Make So You Can Try To Avoid Them
With tax season in full swing, it easy to experience a little anxiety. Though I've been doing my taxes for a few years now, the fear that things aren't 100 percent accurate makes me nervous when it's time to hit the submit button. Even if you take your taxes to a professional, there's still a chance that you'll encounter some of the common tax mistakes people make, so it's always good to take special notice of what you're submitting.
There were two times I ran into issues with my taxes, and they were some of the most stressful times I can remember. Seriously, nothing is worse than getting a letter from the IRS. I literally felt like my heart fell to the pit of my stomach when I checked my mailbox and saw that I had a letter from them. Even though these mistakes were easy to fix, they served as a huge reminder that it's important to be thorough come tax season. (Especially since those mistakes can keep you from receiving your tax returns on time.)
To avoid getting those letters from the scariest people on the planet, here are 11 mistakes you should watch out for come tax season.
1Missing The Deadline
According to NerdWallet, one of the biggest mistakes people make is missing the filing deadline. The site noted that missing the deadline opens you up to a five percent penalty on the amount due for every month or partial month your return is late. An alternative to filing late would be to request an extension.
2Writing Down The Wrong Bank Information
Back in college, my stepdad always did my taxes for me. Though I was appreciative of his help, the one year I really needed my money back ASAP, he put the wrong routing number on the form for my direct deposit. Because of that, I had to wait even longer to get my money back, and I'm sure no one wants to go through that.
3Not Double Checking The Math
Bankrate noted that math miscalculations are a common tax error, noting that any type of miscalculation will result in a correction notice. Be sure to double check your numbers
4Writing The Wrong Name
According to NerdWallet, providing the wrong name is an issues because however your name is spelled on your tax return is how it will be printed on the check. Although it seems like this shouldn't be an issue, if you don't use your government name often, it's quite easy to happen.
5Leaving Out Documents
Remember those two times I mentioned I had a tax scare? Well, this was one of them. Last year, I forgot to report one of my forms on my taxes, and it resulted in a correction notification. Be sure to enter all of the information and, if you're mailing your forms put every form in the envelope.
6Not Entering Charitable Donations
Made a few donations to Goodwill last year? Don't forget about adding those in while doing your taxes. Bankrate noted that not completing your charitable donations during tax time could keep you from valuable tax deductions. Be sure to keep track of and enter any donations you've made over the year.
7Not Keeping A Copy Of Your Returns
According to TaxAct, not keeping a copy of your returns is a common mistake. If you're not filing on an e-file system that allows you to have downloadable access to your returns for a few years, keeping a copy is super important for at least three years. The site noted that this specific timeframe is the legal length of time that the IRS can audit you for gross under-reporting of income.
8Forgetting To Sign
Though it seems like a simple thing to remember, if tax time gets you flustered, forgetting to sign your forms is easy to do. Although it's never happened to me personally, a friend of mine forgot to do so in college, which delayed them receiving their cash.
9Depending On Write-Offs To Get Money Back
Though tax write-offs are usually a freelancers saving grace, Entrepreneur cautioned against writing-off too much. Though some of the write-offs are necessary for entrepreneurs and freelancers, it's important to watch how much you write-off so that you don't become susceptible to an audit.
10Missing A Tax Break
TaxAct also noted that people often miss big tax breaks when doing their taxes. Those with families or those that are students should pay special attention to the tax breaks offered because they can help lower your tax bill.
11Neglecting To File
Though this one seems like it should be automatic, many people simply just neglect to file their taxes, How Stuff Works noted. Even if you don't have all the funds to pay what you owe, there are options such as filing an extension or paying in installments. Find out the best option for you before you decide not to file at all.