Common Errors When Filing Income Taxes
Nowadays, thanks to tax preparation software, it is easier to file annual tax returns. Nevertheless, you should take note that with just one mistake in typing in your data when filing on a software it may end up costing you, either in the form of a larger tax bill or a smaller refund. Additionally, even when a mistake, either on your PC or paper forms, doesn’t cost you any money, it could delay the receipt of any refund you’re expecting.
Another crucial factor that you need to remember, is that any changes in your taxes can also make the annual tax-filing exercise even more confusing. For example, during the 2015 tax year, reporting and filing requirements prompted by the Affordable Care Act have caused a myriad of problems for taxpayers, tax professionals and even the IRS. Whether or not are there are special taxes to be applied in the current year, there are still plenty of incidents that you may accidentally mess up a 1040 form.
Incorrect Math Calculations
Every year, the most common error that occurs on tax returns are incorrect math. Any errors in arithmetic or in moving figures from one schedule to another will get you an instant correction sign. Be warned, even the most simple math mistakes also can lessen your tax refund or result in you owing more taxes than you thought. Your first and foremost job is to get all the numbers right because the IRS will be double-checking numerical entries against its copies of your tax statements (W-2, 1099s and the like).
Another typical math error that can happen are computation errors, during this event taxpayers or their accountants make errors in figuring such tax-return entries as taxable income, withholding and estimated tax payments. Also, credits and special deductions also pose problems.
Misspelled and Incorrect Names
One important rule that you need to remember, is that the IRS is not just all about numbers, but words too, especially correct names. If case the names of a taxpayer, his or her spouse, or even their kids don’t match with the tax identification number that the Social Security Administration will provide it may start different problems with the processing. Typically, this issue is a normal one especially for women who are newly married. That is why it is important that you should announce to the Social Security Administration as soon as she can when she got married and will be changing surnames.
Additional Income Means More Filing Work
If ever you have additional jobs, for example, as a contractor you will most likely receive a Form 1099-MISC detailing the extra earnings. You should never miss out on declaring these important details or the IRS will count this against your owed taxes. There are many other tax problems that you will encounter, it is important that you know how to amend them to avoid problems.
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