Common Tax Mistakes and How to Avoid Them

Tax preparation can be a major hassle and headache for most people. If you don't file taxes carefully, you can make mistakes. Here are some common mistakes to help you be more accurate.

Incorrectly Claming A Dependent Child: This is common especially when parents share the child rearing and support. The IRS has changed the definition of a child to make it easier and this cleared up questions in many cases. Be sure to discuss with the other people eligible for claiming the child and make sure only one of you is claiming the child.

Making Math Errors: The most common mistake on tax returns is bad math. Mistakes in arithmetic or in transferring figures can cause a large error. Tax software programs can help reduce this type of errors by doing the math and transferring of number for you. Always double check your entries, the program doesn't know that you meant $3,500 when you typed $5,300. And an error of that amount can cause of huge tax difference.

Not Including Social Security Numbers: The IRS no longer puts your SS number on your tax forms due to privacy reasons, so make sure you enter them. You ID number is crucial because without this number the IRS may deny some of the tax breaks you are eligible for.

Not Signing And Dating Your Return: For legal purposes the IRS cannot process your return if it isn't signed. If you file online, get a pin or make sure you send in your signature page.

Forgetting About Interest And Dividends: The IRS already knows how much unearned income you have so be sure to claim it correctly. Neglecting to add in this information could result in penalties and interest charges.

Forgetting To Claim Charitable Donations: This can give you a very valuable tax break and many people forget to claim their donations. Make sure that your donations are to organizations qualified as tax-exempt with the IRS.

Not Including All Your Forms: Make sure you send your W-2 forms so that the IRS can confirm your reported wages. If there are other forms needed to support your 1040, be sure to send those as well.

Using The EZ Form When A Longer Form Could Cut Your Taxes: While the 1040EZ may take less time and be more convenient, it may actually cause you to pay more taxes. A longer form may not take that much longer as you only have to fill out the lines that apply to you.

Making The Check Out Incorrectly: Make sure that if you owe money, you make the check out to the United States Treasury and not the IRS. The IRS can easily be changed by a thief and be sure to sign your check. If the IRS has to send your check back you may miss the deadline and have to pay penalties and interest.

Not Taking The Credits You're Eligible For: Credits can directly reduce your tax bill and often get you a refund when you would have owed.

Not Putting The Proper Postage On Your Package: Many people mistake the amount of postage needed on their envelope and it is returned to them. This can cause late fees, penalties or your return to be delayed.

Don't forget to double check your return this year and make sure you take extra caution so you can avoid penalties and fees and get all the refund you have coming to you.