Mistakes to Avoid When Filing Taxes

When filing taxes, the process can be quite challenging for some. The rules are complex, but taxpayers seem to make mistakes when filing that are mostly very simple. Let’s take a look at some common and avoidable mistakes people make when filing their taxes.

Firstly, many people do not file their taxes on time. According to TaxAct, 20 percent of people wait until the week before their taxes are due to submit them. While you can file for an extension, if you do not make your tax payments by the given date, the IRS will charge interest. Next, avoid putting any incorrect information or leaving any information out. Many people will actually import their return from the previous year to ensure they do not make any typos or miss information.

Also, stay away from any math errors, as this is a mistake that can cost you. Using systems such as TaxAct and TurboTax can help you avoid these errors as they compute the calculations on their end. Try not to fall behind in the latest tax news. Congress changes the regulations each year, and you do not want to be surprised with any new requirements during the time of your filing. You can subscribe to the IRS News page to keep up to date with any new tax filing information.

It is crucial to keep a copy of your return in case any unexpected hiccups occur. Tax experts suggest people keep their copy of their tax return for up to 3 years as that is the amount of time the IRS has to be able to audit you for any such reason. One of the biggest mistakes you can make is messing up your account and routing numbers for your bank. If these are not correct, it will stall your tax return and may lead to additional requirements. Lastly, make sure you file under the correct status. There are different tax rates and reductions for the various filing statuses, so you want to make sure you are filing the way you should be. Filing under incorrect status can result in the delay and even rejection of your tax return.

Located in Madison, Wisconsin, Kristian Finfrock is the Founder of Retirement Income Strategies and a local radio show host. Learn more @ kristianfinfrock.org