Tax Bloopers You Can Easily Avoid

Sometimes the most innocent of mistakes can turn into complete headaches. A mistake on your return, whether it’s a math error or a forgotten document can delay your refund or cost you money. Although most simple mistakes won’t trigger an audit, a few such as not explaining unusual deductions, could raise questions about your return. To help you avoid those headaches, here are the most common bloopers reported by the IRS.

Before You Seal The Envelope
Before your send in the return make sure you’ve done the following:

√ Double-Checked You Arithmetic
√ Choose The Right Filing Status
√ Included Social Security Numbers For Dependents.
√ Plan To Send In The Return By Certified Or Registered Mail.
√ Investigated The Rules Governing Self-Employment.
√ Correctly Valued Your Charitable Contributions.

Double Checking The Arithmetic
This might seem like obvious advice, but last year the IRS Error Resolution Department caught over 400,000 math mistakes in just one area of the return alone-which is the amount of the refund or tax owed. Hundreds of thousands of other inaccurately computed their capital gains or earned-income credit. Although the IRS will find miscalculations and bill you, it’s better to avoid the bill and the penalty.

Choose The Right Filing Status
If you were single all of last year and got married on December 31, the IRS still considers you married for the whole year. Unfortunately, this means you qualify for

a lower standard deduction than you would if you were both single.

Include Social Security Numbers
For Dependents
There used to be a time when people didn’t worry about getting a Social Security number until they looked for their first job. However, it’s now required even for infants if their parents want to claim their child as a dependent.

Investigate Self-Employed Rules
Many newly self-employed people record their wages where you’d report regular wages. The IRS requires that you enter this amount on a separate schedule. That income is also subject to self-employment taxes, which are calculated on yet another form. At the same time, don’t overlook deductions that you can legitimately make.

Correctly Value Your Charitable Contributions
Even if you donate an item of clothing with the tags still on it, it’s value isn’t based on how much you paid for it, but on what the thrift shop could get for it. Legitimate charitable organizations will be glad to give you a receipt for your donations, so be sure to get it.

Above all, if you double-check your work or your tax preparers work, you less likely to fall victim to tax mistakes. Don’t let the IRS scare you. After all, they make mistakes too. So if you get a balance due notice, calmly investigate the problem and respond immediately so that you keep the lines of communication open.

If you need help in finding competent tax professionals who can assist you with your financial situation, please call me for a referral.