5 Common Tax Mistakes and What to Do Instead

Everyone does their taxes every year. And yet, no one ever seems to get it right. Many people file their taxes filled with mistakes that they’re not aware of until it’s too late.

of having to file multiple times, here are the five most common mistakes people make on their tax returns and what you can do to avoid them.

1. Contains Inaccurate Information

Although most errors are honest mistakes, many of them could be considered acts of fraud. That’s why it’s important to speak to a tax advisor in Washington DC when you’re filing your tax returns.

If you’re not careful, you could even get audited, which is not only time-consuming but also stressful. Some of the most common errors are:

• Inaccurate or missing Social Security Numbers: if written incorrectly, your return will be rejected and you’ll be asked to refile. If you’re filing a joint tax return, you should include your spouse’s SSN as well.
• Misspelled names: always use your full government name, not nicknames.
• Data entry errors: If your reported numbers don’t match what the IRS has on file, you will be notified.
• Wrong filing status: there are typically five to choose from (Single, Married Filing Jointly, Married Filing Separately, Head of Household, Qualifying Widow(er).)

2. Filing Too Early

When it comes to filing your taxes, doing them too early can be a mistake. You might forget to include a few important tax documents.

Some tax forms might not even arrive until February, so it’s better to wait until you have everything you need instead of filing early and getting into trouble.

3. Filing Too Late

Taxes are due on the same day every year: April 15th. If you file late without filing for an extension, then you will be charged with a Failure to File Penalty.

This is usually 5% of unpaid taxes for each month or partial month that your return is late. There is a Form 4868 that you can file if you don’t think you’ll be able to make the April deadline; it needs to be filed before April 15th.

4. Not Reporting All Sources Of Income

In most cases, failing to file a source of income is a conscious decision, and the IRS doesn’t look down too kindly on it.

If you have any side gigs that provide you with money that you don’t receive a 1099 for, you’ll still have to pay taxes on that earned income.

Reporting less than you actually earn can also be detrimental to your finances since you’ll have a more difficult time proving your creditworthiness if you’re buying a house or a vehicle.

5. Claiming Credits And Deductions You Don’t Qualify For

Looking at the long list of tax credits and deductions, it can be difficult to figure out which ones you actually qualify for.

There is no easy answer to figuring this out without looking at your unique tax situation, which is why it’s important to speak with a tax specialist to help you out. They can look at your circumstances and figure out what credits and deductions can be applied to your return.

Sorting out your tax situation isn’t easy for anyone, making it a stressful time every year. If you want to skip the hair-pulling, consider speaking to a tax specialist or accountant to help you figure out the intricate details of your tax return.