The deadline to file 2013 taxes or an extension is just around the corner. Errors in filing taxes are common and can be expensive or difficult to correct. Avoid these common tax filing mistakes for a smooth filing process:
- Late filing: Returns must be filed or posted on or before April 15th. It’s not negotiable and it isn’t a suggestion. Late filing, failure to file, or failure to pay penalties and interest will apply. If you can’t get your return filed before the deadline, file an extension. Remember, an extension is only an extension on the time to file. It isn’t an extension on the time to pay taxes that are due. If taxes are likely owed, submitting an estimate before the deadline is recommended.
- Computation errors, mismatched information, and spelling errors: As the saying goes, “an ounce of prevention is worth a pound of cure.” Take the time to double-check math, names, and Social Security numbers. Errors can delay the processing of a return and the potential refund. Math errors can result in future IRS communications and requests for corrections.
- Filing status: The filing status chosen has a tremendous impact on a return. In our tax system, each of the various tax filing statuses has a specific set of rules and numbers taxpayers must follow. A change in filing status can be triggered by marriage, divorce, the birth of a child, the death of a spouse, or even the care provided to elderly parents. Unsure about which one fits your situation? The IRS provides guidance here.
- Out of date numbers: Tax rules change every year. Taxpayers can use prior year returns as a guide, but should never rely on the same numbers without double-checking that they are still accurate.
- Incomplete information and missing forms: The IRS should receive a copy of every tax form you receive from every employer, investment account, home mortgage, business, or college debt account attributable to you. Don’t leave anything out. When your return is compared to the information received by the IRS, discrepancies will result in requests for corrections from the IRS and delays in the processing of your return.
- Signatures: Tax returns must be signed by the taxpayer. Even electronically filed returns must be filed with the correct PIN number. Tax returns that are unsigned will not be processed.
Does tax filing season find you searching for missing forms, clawing through receipts, and frantically rushing to the post office at the last minute? Commit to organizing the information needed for tax filing throughout the year. Create a file with the current tax year and keep it readily available. Put everything needed for tax season in the file as it is received, including receipts for business expense deductions, charitable donations, medical expenses, and all other miscellaneous items that normally leave you scrambling when it’s time to file. Next year, you’ll be cool, calm, and prepared when it’s time to file.