Mistakes When Filing Income Taxes
Nowadays, with the aid of 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. In addition, even when a mistake, either on your computer or paper forms, doesn’t cost you any cash, it could delay the receipt of any refund you’re expecting.
One thing you have to remember is that tax changes can also complicate the annual tax-filing exercise. For example, in the reporting and filing of requirements prompted by the Affordable Care Act have produced a numerous problems for taxpayers, tax professionals, as well as, the IRS. Whether are there are special taxes applied in the current year, there are still plenty of ways to mess up a 1040 form.
Incorrect Math Calculations
Each year, the top most common mistake that happens on tax returns are incorrect math. Any kind of error in your arithmetic or in moving figures from one schedule to another will get you an instant correction warning. In addition, math mistakes also can lessen your tax refund or result in you owing more taxes than you thought. Your most important job is to get all the numbers correct since the IRS will be doing a double-check all of the numerical entries against its copies of your tax statements (W-2, 1099s and the like).
One common math error that can occur are computation errors, during this event taxpayers or their accountants make mistakes in figuring such tax-return entries as taxable income, withholding and estimated tax payments. In addition, credits and special deductions also pose problems.
One important thing you need to recall, the IRS is not just all about numbers, but words too, especially correct names. Whenever the names of a taxpayer, his or her spouse or their kids don’t match with the tax identification number that the Social Security Administration has on record it may start different problems with the processing. Usually, this problem is a normal especially for women who are newly married. That is why it is crucial 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 you have any side job, for example, as a contractor you will most likely receive a Form 1099-MISC detailing the extra earnings. Never miss on declaring these important details or the IRS will count this against your owed taxes. There are numerous other tax problems that you will meet, it is vital that you know how to amend them to avoid problems.