Do you know that you can save money when filing your taxes? Most of you still make common mistakes that cost money when filing taxes. By avoiding these simple mistakes, it is very easy to save money on taxes and get maximum tax return possible. What are the common mistakes when filing taxes? That is what we are going to find out in this article.
1. Not Filing on Time
If you are tempted to wait a few weeks after the deadline before filing your taxes, don’t! The IRS charges a compounding daily interest (plus an additional 3%) against any unfiled taxes. This means you will actually pay more by filing your taxes late. The annual tax filing deadline is April 15th; be sure to file your taxes before then.
2. Incorrect Information
Avoid fines and charges by double-checking your tax report before filing it. Use a tax software to help check your tax reports; today’s best software can identify mistakes and correct them for you. Once it is done, file the tax report electronically and save a lot of time in the process.
Don’t forget to sign your return as well; this is the most common form of incorrect tax filing these past several years. You cannot get the refund you are aiming for if there are mistakes in your report.
3. Count & Count Again
The tax software can only do so much. You still need to enter the correct financial details and calculate your numbers properly to avoid paying too much – or too little – in taxes. Start early, take your time and calculate every part of the report two or three times to avoid calculation errors.
4. Falling Out of the Loop
Visit the IRS’s website and read the latest tax news. The last thing you want is to miss important changes and updates on tax regulations. Especially those that influence the amount of tax you are required to pay or the return you can claim.
The IRS’s website also contains information on tax credits and exempts. The government is making a lot of tax cuts available these last several years; it would be a waste not to use the ones you qualify for optimally.
5. Not Keeping a Copy
Always keep a copy of your tax return. Ideally, you should keep copies for at least three years. Should you spot errors in the future, you can file for an amended income tax return and get the report corrected.