It’s officially tax season, so you know what that means—it’s time to bust out your calculators, statements, receipts, and tax documents, and get in the tax filing zone.
Whether you’re taking control and filing your taxes on your own, using an online tax service such as TurboTax or H&R Block, or leaving everything to your trusted accountant, filing taxes can be a daunting process, especially for first-time filers.
Common Filing Mistakes
Regardless of whether you’re filing taxes for the first time or you consider yourself a self-proclaimed professional, it’s important to be fully attentive and invested in your taxes to avoid mistakes. We’ve got a list of some of the most common mistakes to help you this tax season:
1. Mathematical Errors
Believe it or not, math mistakes are one of the most commonly seen errors on tax forms. It’s common for numbers to blend together after a while considering all the time spent crunching figures and adding items line by line. But even one single mistake can throw off all your math on the forms, leading to a potentially messy situation with the IRS. On occasion, they may catch the faulty mistake and fix your error. In this case, you’d be notified about what was corrected, and how it may affect you and your return or refund.
However you decide to file your taxes, be sure to check and double check your calculations before submitting your documents to avoid any mishaps.
2. Filing After the Deadline (or not at all)
“I’ll get to it later,” or “I have a few months before taxes are due.” There are plenty of excuses as to why people wait to file their taxes, but before you know it, it’s past the deadline and you haven’t filed. There’s no escaping your taxes, and subsequently you’ll be charged penalties and interest. As tempting as it may be to put them off, take the safe route and file your taxes early with plenty of time to spare so you’re not scrambling to meet the deadline.
Or, if you know right off the bat that you need more time to file, you can apply for a 6-month extension from the IRS. There is a fee for an extension, however, you’ll put yourself in a better position compared to filing late. Your best bet is to just file early and on time to dodge any penalties or fees.
3. Missing or Inaccurate Information
Don’t forget to pay close attention to the personal information you’re recording on the form. It’s common to flub your account number or social security number, unintentionally leave boxes blank, misspell information, or mix up last your name due to a change in marital status. Your personal information is a critical piece in filing your forms. Though accidental, any missing or incorrect information on your tax form could result in penalty charges, delay your return, or trigger an audit.
Compare your taxes to last year’s return and if anything has changed for this year, be sure to update the information whether you’re filing solo or meeting with your tax professional.
4. Incorrect Filing Status
There are five types of tax filing statuses: single, married filing separately, married filing jointly, head of household, or qualifying widow(er) with dependent child. Tax rates differ, so whichever filing status you fall into can have a significant effect on your standard tax deductions, the amount of taxes you may owe, or any refund credits you’re entitled to.
Not sure what your filing status is? Use this helpful Interactive Tax Assistant tool courtesy of the IRS.
5. Underreported Income
Oftentimes, it’s easy to forget about secondary income, especially if it’s outside your regular job. Extra income can include freelance gigs, side jobs, interest/dividends on bank accounts, and award/lotter winnings. Keep organized records and ensure your W-2s, 1098 and 1099 forms, and any other applicable forms are recorded accurately on your tax forms.
6. Missing Signatures
The hard work is complete, so all that’s left to do is sign your documents. It’s one of the easiest and most important steps in the process but is often overlooked due to the complexity of filing in general. Most people are focused on getting the numbers portion correct, so signatures are the last thing on their mind, but without necessary signatures, the forms are invalid.
Make sure you look over the pages very carefully to ensure that you’ve completed all the required steps, including signing your name.
Making tax mistakes can cost you and your wallet big time. Tax mistakes are common but are preventable. Remember to be fully engaged in the process, take your time, and if at all possible, file early to avoid mistakes.
If you’re at all unsure or have questions about any tax-related items, we highly recommend you consult with your tax professional.
Getting a Refund vs. Owing Money
Got your taxes filed? Good! At this point, it’ll feel like a huge weight off your shoulders. So, what’s next? Now, it’s the waiting game to find out whether you’ll get a return or owe money.
If you’re one of the lucky ones getting a refund, but you’re not entirely sure where to put your money, our branch team can help: 484-223-4444.
Got the news that you owe money, but you’re not quite sure how to cover it? A GOLD Personal Loan can help foot the bill. We’ve got options with great rates and flexible terms. Call our lending team for guidance: 484-223-4216.
Either way, we’re here for you Monday-Friday, 8:30 AM to 5:00 PM.