5 Tax Mistakes That Cost You

Description

Simple tax errors can delay your refund, cost you a penalty or result in paying the government more than your fair share. Here's how to avoid the most common mistakes.

Let’s face it, we’re all human - “born to make mistakes …” as the song (and commercial) goes. But try explaining that to the IRS at tax time.

A miscalculation here, a forgotten signature there... and bam! It could delay your refund, cost you a penalty or result in paying the government more than your fair share. Don’t let that happen to you. Take time now to avoid these and other common mistakes:

Incorrect Social Security Info

No number, transposed numbers, a missing digit or an incorrect name—any or all of these errors can create more than a tax-time headache for you. (A wrong number could belong to someone else, so be sure to get yours right.) If your name has changed or you have questions, contact the Social Security Administration.

Wrong Status

“It’s complicated.” won’t fly with the IRS—but neither will “Married” or “Single”—if it doesn’t reflect your status on Dec. 31. For example, if you were single that day, you’re single for the year—regardless of when you got divorced. If you were married then, you were married for the year. Seems logical, but it’s a common mistake you can easily avoid.

Not Checking for Updates

Before you start copying the same ol, same ol’ from last year’s tax form, check for updates to tax laws. Things change every year. Don’t get in hot water for taking something that’s no longer yours.  When in doubt, check it out!

Missing Deductions and Tax Credits

Don’t assume you’ve ticked all the boxes on this one. As we said, “Things change every year.” Millions of people miss out on deductions and credits (to the tune of $1 billion a year). For example, did you:

  • Go back to college?
  • Buy a house last year?
  • Experience a major life change, like having a baby?

These and a LOT of other things may qualify for deductions and/or tax credits that can add up in your favor. Be sure to check them out!

Filing Late

What if you owe the government money but don’t have the cash to send a check with your tax form? File on time anyway. The penalty for not filing is 10 times the penalty for not paying.

If paying your taxes by April 15 will present a hardship, then go to IRS.gov to find out more about a payment plan.

Written by Mary Thoele

This blog post is from the Author's perspective and doesn't speak for brightpeak financial. Contact brightpeak if you want to know more about brightpeak products, and keep in mind that they are not available in all states and there are some limitations (some exclusions and restrictions may apply).

 

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