Tax season is almost at an end, with payments and returns due on April 15. Making sure you file an accurate and complete tax return is essential to making sure you don’t suffer any penalties and get your refund in good time. A tax return may be inaccurate or incomplete for various reasons, ranging from minor mistakes like missing a signature to more significant issues such as misreporting income or miscalculating a tax credit.
Newsweek has broken down some of the mistakes you can easily avoid ahead of filing this year.
Missing or Inaccurate Data
Incorrectly spelling names, forgetting to sign, making math mistakes, and wrongly inputting Social Security numbers or bank account numbers can hinder the acceptance of your tax return.
Forgetting Tax Forms
“I see a lot of people tend to forget tax forms,” Ahad Ali, certified public accountant and CEO of Ahad&Co, told Newsweek, drawing particular attention to 1099 forms, which are used to report different types of incomes like independent contractors, gambling winnings, rents, royalties, and more.
He also said that those who have had multiple jobs in the year sometimes forget to file multiple W2 forms, which are used to report wages paid to employees and the taxes withheld from them.
Incorrect Deductions
There are numerous tax credits and other tax reduction options for American taxpayers, some of which can result in the IRS paying you a refund. But getting these wrong will result in the IRS rejecting your return, or putting you up for an audit.
“Try not to exaggerate your expenses and deductions,” Ali said, as the IRS can detect if there is an unusually high amount of these. Ensure you correctly claim any dependents: for example, if you have a child who doesn’t live with you, the IRS will likely contact you to provide evidence.
Filing Late
This year’s deadline is April 15, and failure-to-file penalties apply if you miss the tax return deadline and do not have a valid extension in place.
If you’re late filing and owe this penalty, the IRS will notify you with a letter or notice. The penalty is a percentage of the unpaid taxes and is calculated based on how late you file and the amount due as of the original payment deadline.
Filing late can also delay any tax refund you’re owed, so planning ahead and meeting the deadline is in your best interest.
If you need more time to complete your tax return, request an extension. However, an extension only gives you extra time to file—it does not extend the deadline for payment.
What Happens If My Return Is Rejected?
If any information is missing or incorrect, the IRS may return the form or send a notice requesting the necessary details to complete the processing of your tax return. The notice should explain the issue and how you should respond to the IRS.
If you realize there was a mistake on your return and you haven’t been contacted, you can still amend it using Form 1040-X, Amended U.S. Individual Income Tax Return.
The post Most Common Mistakes To Avoid On Your Tax Return appeared first on Newsweek.
