Mistakes To Avoid When Filing Your Taxes
Finally, the long and cold winter is winding to a close. While spring is here along with it is the looming tax deadline. You’re ready, tax documents in hand, to complete your filing and send it off to the IRS. Before you pop it in the mail or hit the send button on your e-filing, take a look at our easy tax submission errors and double check your return.
According to the IRS, individuals who complete their taxes on paper, versus using a e-file are 20 times more likely to make mistakes. Why take the risk? File electronically to catch simple typos in your name, social security number and basic filing demographic profile. Be sure to double check the SSNs for you and any member of your family being claimed or reported in the filing.
Did you have health insurance in 2015? If the answer is no (on line 61 on Form 1040) then be sure to make your tax penalty payment for 2015. If the answer was yes and you used the federal or state health insurance marketplace, be sure to claim any received premium tax credits using Form 1095A. Remember that if you are uninsured in 2015, the penalties increase to 2 percent of your yearly household income.
Earned Income Tax Credits are refundable tax credits for low to moderate income individuals and couples, especially those with children. If you are taking the EITC, be sure that your qualifying child(ren) meet all of the required terms and that your income derrives from an outside employer or farm.
Did you or any of your dependents attend college in 2015? Complete Form 1098-T to claim any educational tax credits for attending a qualifying college or university.
Double and triple check bank routing information before you hit the submit button on your e-file. If you did make a mistake after sending the filing to the IRS, you track it down by calling the IRS at 1-800-829-1040. You can also visit IRS2Go, the mobile application for IRS refunds, or log in to the Information portal at IRS.gov at Where’s My Refund? If you weren’t able to catch it at the IRS, you can rest a little easier knowing that the IRS will revert to sending a paper refund check in the event that the bank routing information errors. It may take longer to receive your refund, but it will eventually arrive.
Failure to report all reportable income raises numerous red flags with the IRS. Be sure that you’ve gathered together all applicable tax documents including 1099-MISC, 1099-DIV, W-2s and any other income received during the previous tax year. The IRS receives copies of all these documents from your employers, investment and banking institutions and other financial organizations. It’s not worth trying to hide a bank account or ‘omit’ a document because inevitably, the IRS will find out about it. Additionally, omissions will further delay your return or any funds owed to you. With unreported earnings, you may also owe more than you originally reported, which can result in hefty penalties and interest over time.
Sign and date your return. This applies more to those individuals who still want to use a paper filing, but whether your submit by paper or e-file, be sure to complete the entire document and complete the signature page. If it is a joint return, be sure that you have your spouse sign and date or e-sign the filing as well.
If you owe taxes, be sure to either make a payment or make arrangements for a repayment plan. Include your check or money order made payable to United States Treasury” or your specific state’s Treasury along with your tax documents. Include your name, address, SSN and tax year on the check.
Did you claim the right number of dependents and/or exemptions? Double check just to be sure that you didn't make any errors.
If you’re sending a paper filing, be sure to include enough postage. It would be a shame to complete your taxes and mail them off on time, only to have them returned after the tax deadline for insufficient postage. Worse yet, not have them returned at all because you didn’t put a return address on the envelope.
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