5 Most Common Tax Mistakes
Paying tax is an essential part of managing financial assets. Humans make mistakes, but making mistakes in the tax return can have many consequences. The tax code of the US is composed of approx 4 million words, which is a complicated tax jargon. There are several rules associated with tax returns, and even if the rules are complex, some of the tax mistakes are simple and noticeable. To avoid such noticeable mistakes, have a look at the following five common tax mistakes that a taxpayer should be aware of:
1. Not filing tax on time
The IRS (Internal Revenue Service) in the US reported that around 20% of the taxpayers wait to file the income tax return until the last week before the deadline. This behavior of procrastinating the tax return of some of the taxpayers leads to the missing deadline. Sometimes, taxpayers face problems while filling the forms because they get late to file the tax return on time.
If the tax return is not paid in time, then the taxpayers can ask for more time by filing an extension. Moreover, if the return payments are not made by the due date, then the IRS charges the interest.
2. Missing or incorrect information
Leaving a text box blank or filling incorrect information is one of the most common tax filing mistakes. When the form is filled for the tax return, then the missing or incorrect information should be avoided. The solution to avoid such mistakes is to keep the last year’s return form and carry it the next time the tax return form is filled. The previous year form helps to keep a count on writing the information correctly.
3. Math errors
There can be various sorts of errors in filing the tax return, and one of the types include math errors. The math errors can be more common, as the formulas for calculating any mathematical amount are tricky. For say, add line 8 to line 32 and multiply by 356 if the AGI is greater than $50,000.
To get rid of such head aching math errors, use the software of tax preparation that can perform calculations.
4. Falling behind on the latest tax news
Behind the complicated tax code, every year, changes are made in the code. To be aware of the changes made in the tax code, make sure to read the latest news.
5. Not keeping a copy of your return
It is always advised by the tax experts to keep a copy of the tax return for the past three years. The previous year’s copies of the income tax return are beneficial to avoid any mistake related to filling information, e.g., account number, etc.
Conclusion
The above-mentioned are the common tax mistakes that are usually observed by the taxpayers. These mistakes are simply noticeable and should be avoided to prevent any consequences. The mistakes can cost a lot, so the following common tax return mistakes should be remembered.
