Don't make these 10 last-minute tax-filing mistakes
Thursday, April 14, 2016
Tax Day is almost here. If you're one of the millions still to file, I understand. No judging here. I'm part of the last-minute tax crew, too.
The key as April 18 nears is not to panic. If you freak out while doing your taxes, you'll likely make a mistake (or two or …) that could be costly.
So that you don't end up writing a check like the one above, here are 10 common tax-filing mistakes to avoid.
1. Math miscalculations -- This is the most common tax mistake every filing season. It includes addition, subtraction, percentage calculation and figure transpositions when you enter the number. And an error on one form could transfer if you use software to other filing pages, compounding the mistake.
2. Direct deposit errors -- Be careful if you have your refund sent directly to your bank account. If you enter wrong financial account or routing numbers or transpose numbers, your money could end up in someone else's account and it could be a hassle getting it back.
3. Overlooking additional income -- Those 1099s you got, they were copied to the Internal Revenue Service. So is you forget about those side-job payments reported on 1099-MISC forms or miss the 1099s reporting your investment earnings, you'll hear from the tax man.
4. Filing status confusion -- Your divorce was final last year, so you file as single, right? Wrong, if you have custody of your children. As their primary guardian, you can file with the more tax advantageous head of household filing status. If you're unsure of your filing status, use the Internal Revenue Service's Interactive Tax Assistant.
5. Wrong or missing Social Security numbers -- If you don't enter tax ID numbers or enter wrong ones for yourself, your spouse's and any dependents, then your tax return and any claims associated with these nine digits will be kicked back to you. So be sure you enter all SSNs on your tax return exactly as they are on the Social Security cards.
6. Name errors -- Just like with Social Security numbers, name discrepancies will cause tax return processing problems. Be sure you spell the names of everyone on your tax return exactly as they are on their Social Security cards.
7. Charitable contribution oversights -- Don't cheat yourself by ignoring charitable donations you made in ways other than just a check or credit card charge.
8. Missing signature -- You must, must, must sign your tax return, either in ink if you're still going the paper route or by following the appropriate electronic signature directions. If you file a joint return, both you and your spouse must sign your 1040.
9. Electronic filing PIN errors -- Along the same line as missing e-signatures are errors in the Personal Identification Number (PIN) you must have to file your return electronically. If you know last year's e-file PIN, you can use that. If you don't know it, you'll need to enter the adjusted gross income (AGI) from the original return you filed the year before. Don't use the AGI from an amended return or one that the IRS corrected.
10. Health care reporting errors -- The IRS says that the most common Affordable Care Act, aka Obamacare, reporting errors that taxpayers make involve failing to claim a coverage exemption and not reconciling advance payments of the premium tax credit. Exemptions are granted for individuals who don’t have qualifying health care coverage but meet certain criteria. The advance premium tax credit (PTC) is available to qualifying individuals who get health coverage through the Health Insurance Marketplace to help them meet the coverage's cost. Those PTC credit payments must be reconciled on the insured's tax return.
Hang in there. Tax Day is almost here.
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