Doing your taxes can be extremely complicated at times. If you plan to do them on your own, be careful because there are many areas you can make a mistake. These mistakes can be a headache to resolve. Avoid making these tax mistakes by following the advice in the below article.
The Five Most Common Tax Mistakes
Sadly, one common tax mistakes make in calculating their taxes is not using a calculator. What makes this really bad is that this is the easiest mistake you can prevent. Some people are so egotistical that they think they can do their taxes without one. Even tax professionals use a calculator when they do their clients’ taxes. Doing taxes without a calculator is just asking for trouble. There are so many things that can go wrong. A simple miscalculation in your head can mess up your entire tax return. This can be prevented by using a calculator.
Another common tax mistakes make is not double-checking their calculations. Although using a calculator helps to reduce miscalculations, there are still other mistakes you can make. You could type in the wrong number performing a calculation or accidentally miss a number, leading to a huge mistake in your tax return. Therefore, whenever you finish your return, go through every calculation again to double-check that it is correct. If you have ran through it again and all the numbers are right, then your return is much more likely to be accurate.
Some taxpayers end up making a mistake whenever they look at their tax table. Therefore, they may multiply their earnings by the wrong percentage, which causes an error in their amount of taxes due. In addition, not all income is taxed in the same way. There are two types of income, ordinary and capital. They are both taxed at different rates. Therefore, you should make sure your income is correctly identified as either ordinary or capital, and then determine which tax table to use.
Believe it or not, some taxpayers focus so much on making sure all the numbers add up that they do not pay much attention to see if they entered in their social security number correctly. Entering the right social security number is crucial for ensuring that the IRS correctly identifies you. If you are not 100% sure what your social security number is, notify the Social Security Administration. Another surprising common mistake some taxpayers forget is signing their tax returns. Always make sure you have signed it.
Common tax mistakes people make when filing income taxes
The last common tax mistakes make is not reporting all of their income. Some people fail to realize that 1099’s, W2’s, and other documents they receive are also received by the IRS. Therefore, if you don’t report this income, they will get you. Always go over all the documents you have received for working to make sure you do not leave out any income.
Knowing the tax mistakes you should try to avoid is only part of the solution. Knowing how to prevent these mistakes is the other. Apply the advice from the above article so that you can prevent making these tax errors in the future.
