Common Income Tax Mistakes

on April 22, 2012

The IRS lists several common mistakes individuals make when filing taxes.

Carelessness. Remember in high school when you’d get back your essay all marked in red because you misspelled 37 words? This, hopefully, taught you to pay attention to detail when writing or filling out forms. Incorrect Social Security numbers, incorrect spelling of names, incorrect bank account numbers, and forgetting to sign and date the return are common typographical errors reported by the IRS.

Faulty computations. Remember in high school when you’d get your math quiz back all marked in red because you made a simple miscalculation that caused you to mess up a three-page solution? This, hopefully, taught you to scrutinize simple calculations when figuring your taxes. Math errors and computation errors are common mistakes made by tax filers.

Filing incorrectly. Remember in high school when you told cheerleaders outrageous lies so they’d go out with you? It probably didn’t work then, and it definitely won’t work with the IRS. A common error when filing taxes is noting the wrong filing status and misrepresenting adjusted gross income.

Not claiming all deductions. You are no doubt grateful for all the many services provided by your tax dollars, but that doesn’t mean you need to pay more than your fair share. Make sure you claim all deductions you are entitled to. Common missed deductions include sales tax deduction, out-of-pocket charitable deductions and student loan interest paid by a parent.

Not taking advantage of income tax credits. Income tax credits are even more beneficial to the taxpayer. Tax credits provide a dollar-for-dollar reimbursement, even if, in some cases, it brings one’s tax liability below zero (so much for paying your fair share). Common tax credits include a tax credit on child and dependent care expenses, tax credits for certain energy-efficient home improvements and the adoptive child tax credit.

Avoid these mistakes and avoid tax time trouble.

Found in: Taxes
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