5 Best Tips to Avoid Common Tax Mistakes
Filing your taxes is never fun. However, you are invariably better off if you take the time to do it right, paying close attention to avoiding the common mistakes that create big headaches for many people. Check your return for errors before sending it off and follow the tips below to make sure your taxes are A-okay.
1. Read up on new changes.
The only thing static about taxes is that you are paying. Everything else around it changes from time to time, from the basic forms to the big rules that may mean trouble if you mistake it. Keep up with the news, read credible websites and articles online, or consult with a tax professional to make sure everything is correct.
2. Figure out your filing status.
Filing as the head of the family is definitely more advantageous compared to filing as a single taxpayer. Learn the qualifications and know your filing status. To be able to file as the head of the household, you must have a dependent and pay over 50% of your household’s expenses. You cannot be married or have lived with your spouse in the last six months, too.
3. Add the write information.
Understandably, math errors are the most common mistake, but entering erroneous data also proves troublesome. Use the exact numbers on your tax forms – never round off or transpose numbers. Make sure your Social Security name and numbers are right, too. More important, get your bank account information correct if you are asking the IRS to direct deposit your refund.
4. Report all income you earned.
This means all income you earned in addition to the pay from your regular job. Virtually all your income is taxable, including anything extra that you earned.
5. Itemize to claim deductions.
Eligibility for certain credits can be quite complicated so take time to research the rules for this. You must itemize to claim some deductions, and itemizing means not claiming the standard deduction for your filing status. Note that you also need specific proof of the deductions that you claim.