(Guest Post by Lisa Rowan)
All too often, the return of tax season is greeted with the dragging of feet and pulling of hair-and that’s even before the pencils are sharpened. Many of the headaches caused by tax preparation can be avoided with a little research and review.
Dodge these seven common tax mistakes, and make preparation and filing a bit easier this year.
- Not paying your taxes: Even if you wait until the last minute to file, it’s important to get those returns in order. If you’re not looking for the Internal Revenue Service (IRS), they’ll certainly be looking for you. Don’t try to pull a Wesley Snipes move.
- Math errors: Writing in all those little boxes can be confusing, and even more so if math isn’t your strength. Remember to use a calculator and double-check your numbers. An extra set of eyes can help you catch mistakes, or invest in tax preparation software to do the math for you.
- Not signing: After all that computing, it’s easy to forget the most important part-signing and dating your return! You won’t get that coveted refund unless you sign on the line. (Editor’s note: YES! I’ve done this before – it is not fun! Don’t forget the stamps either :))
- Routing Information: It’s worth a second look to make sure that refund will arrive. If you’ve selected direct deposit, check over your account information.
- Social Security numbers: If you are married or have dependents, the number of Social Security sequences you have to remember can get overwhelming. Make sure social security numbers for all family members are correct. If any name changes have occurred, be sure to notify the Social Security Administration.
- Overlooked deductions: About ten years ago, the Government Accountability Office estimated that about on about 948,000 tax returns, taxpayers did not itemize deductions when they could have benefited. Imagine what that number must look like today! Charitable contributions, medical expenses, and even job search expenses can be deducted. To learn about what deductions can be itemized and how to do it right, the IRS has more information.
- Paying up: If you owe this year, don’t forget to include a check or money order made out to the United States Treasury. You’ll have to provide some information on your payment: name, address, social security number, daytime telephone number, tax year and form number. Write small! If you file but forget to pay, the IRS will be far from pleased.
Remember to gather your documents in advance, breathe deeply, and take your time. You have until April to get it right :)
Guest post by Lisa Rowan – a media industry researcher by day, and secondhand fashion blogger by night at www.quarterlife202.blogspot.com. She’s a total novice at personal finance and fighting her debt demons, but learns something new every day. She still does her taxes on paper, and doesn’t plan to upgrade any time soon.
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Totally I agree. Not paying your taxes is like making the Government your enemy. Just imagine what the government can do to you.
i dont think that math errors exist anymore because i do not know of anyone who does money calculations by hand anymore. there is software and calculators and other people for that kind of thing
As far as the math goes – I’d recommend using tax software to be sure to get it right. Often, an amateur doing it by hand can easily miss an item that might pay 4X the cost of that software. Did you know that even filers who don’t itemize can take up to $1000 (MFJ) or $500 (single) for their property tax? I’d bet that most ‘by hand’ non-itemizers miss it.
(disclosure – I am a guest blogger on TurboTax, but only because I’ve used the product for 25 years now, not for the free T-shirt they owe me)
@Victorino – I don’t want to imagine :)
@kt – Yeah, that’s probably mostly true. There are still those who go old school, but maybe they’ve perfected it over the years?
@JoeTaxpayer – Hah! I didn’t know that actually…although I’ve been using an accountant for years. I still plan on trying them via TurboTax myself this year, but still filing w/ the accountant to see how far off I was….and oddly enough I’ve guest posted on TT too ;) But more to convince people to donate more and get those write offs, baby!
@JoeTaxpayer: I’ll confess that I did end up e-filing with TurboTax for my federal return this year. TurboTax found a credit that really saved my butt–I never would have caught it had I done everything by hand. Plus, using the printout of my federal taxes made it very easy when I went back and did my state return by hand.
Even with calculators though, I think errors can still be rampant on paper returns. One misplaced digit can be the end of you!
Thanks for reading, everyone. :)
Not filing is insane! lol. We made a minor mistake when we refiled out 2008 taxes to get our $8,000 tax credit sooner after we bought out house last year…and somehow we had our old address on the tax return. By the grace of God they forwarded the check to our new address, because they aren’t supposed to do that. They’re supposed to return them to the IRS and make you refile!
I made a small tax blunder this year. I had saved money to pay the taxes that I knew I was going to owe due to several months of self-employment. When I started entering my forms into TurboTax, it was becoming apparent that I had saved more than I was going to owe. We were waiting for one final 1099 to come in when my wife decided she’d had enough of her computer crashing. I estimated the impact of the 1099 on our taxes, and we spent the extra money we had saved on new computers. When the 1099 finally came, my estimations were off, and we were $1,000 short. Luckily I had enough money in other accounts to pay for it.
paying of taxes is a must. Many turn to keep that out claiming it will help maximize savings.,
Thanks for the great post Lisatella!
@lenciB – Hah! VERY lucky indeed :)
@Keith @ LifeTuner – You are naughty, sir. Rule #1 of Money Club is NO spending until you’ve got it! ;)
@harvestwages – Many people get caught or arrested too! Not worth the risk.
An impressive list of blunders. I’ve been lucky enough to avoid any of these mistakes (although, my fiancee and I need to get going on filing this year, or we’re going to run afoul of #1…), but it’s always good to be reminded of what I might miss.
Us too! We are s-l-a-c-k-i-n-g. Although, there’s a little more to the story that I can’t relay here on the blog…kinda frustrating.