Tax day is just around the corner — this Thursday! So if you’re hurriedly trying to finish up your tax returns, it’s easy to make a number of simple mistakes as you’re trying to meet the due date.
When it comes to completing complex tax forms, many of us are more worried about whether we claimed our deductions correctly or if we have all the necessary documentation for charitable contributions. Often times, we’ll spend so much time worrying about the difficult parts of filing our taxes that it’s easy to flub up the easy stuff.
Watch out for these simple but common mistakes on your tax return to ensure a stress-free and prompt filing process.
Forgetting to Sign Your Return
Your signature is one of the simplest, yet most often forgotten, requirements on your tax return. We get so excited to see that bottom line refund or return amount that we think we’re finished once we’ve reached that final number. Don’t forget you still have to sign and date your return for it to be processed.
Give the Wrong Bank Account Number
The perks of automating your finances can sometimes backfire in a nightmarish way. Obviously, the IRS does not have a record of your bank account number, so if you want your return directly deposited into your account, you’ll have to provide them with your routing and account number. Just remember to provide them with the correct numbers! Double- and triple-check your routing and account number to make sure that you refund won’t end up in someone else’s bank account. (You can imagine the difficulties you’ll have straightening out that mistake).
Wrong Social Security Number
Another common blunder on individual tax returns is an incorrect social security number. Not only do you have to make sure your (and your spouse’s) social security numbers are correct, if you want to claim any dependents, you’ll have to enter their social security numbers correctly as well. Make sure you’ve got these important numbers right so you can avoid any hiccups in your return processing.
Making Work Pay Credit
Many taxpayers will be eligible for the maximum $400 ($800 for married couples) Making Work Pay tax credit this year. This credit was actually already incorporated into most taxpayer’s paychecks as a lower amount being withheld from each paycheck; however, you’ll still need to claim the actual credit on this year’s tax return. If you use the 1040-EZ form to file, the schedule will be included on the form. If you use any of the other forms to file your taxes, you’ll have to attach a Schedule M to claim the credit.
If you’ve already filed your return, but forgot to claim the credit, you’re not alone. The rumor is that many people have already forgotten to claim the credit and the IRS is working on a way to handle the problem. Check with the IRS before you file an amended return because you may not have to file one at all to fix the error.
As more and more people start to e-file using tax software or use a professional tax return preparer, calculation errors probably aren’t as common as they used to be. Still, there are those people that prefer the tried-and-true pencil and paper method. If this is you, be sure you add and subtract numbers correctly on your form. This may seem like common sense, but when you get to rushing while filling out that 1040, it’s very easy to transpose numbers and add and subtract incorrectly.
Not Reporting All Income
You’re not the only one who knows how much money you made this year. All those 1099s and W-2 forms aren’t just sent to you; they are also sent to the IRS. Even if you made only a couple hundred dollars at a side-job this year, you’ll have to report it. You’ll need to report all the income that you earned this year, no matter how small it may be.
Don’t Let The Extension Fool You
If you don’t have time to complete and file your taxes by April 15, then you can file a form that allows you an automatic six month extension to file your taxes. So why doesn’t everyone just file the extension every year and put off filing their taxes that much longer? That’s because the extension is only an extension to file your taxes; it is not an extension to pay any taxes you may owe. So if you usually end up paying taxes rather than getting a refund, you’ll want to avoid filing an extension. If you have to pay taxes and file for the extension, late fees and penalties will start to add up over the extended time period. Avoid all those extra expenses by just filing your taxes on time this year.
Last Minute To-Dos
Don’t forget that your tax return – if you are filing by mail – must be postmarked by midnight on April 15th, 2010. You’ll need to include all W-2s, 1099s, additional schedules, receipts, and any other supporting documentation or forms to complete your return. If you’d rather e-file, there’s still time to get your taxes done using software like TurboTax (Just don’t wait until midnight on Thursday to hit “submit”!)
Once you’ve completed the return and double-checked your numbers, you can forget about those dreadful taxes…until next year of course!