Filing your tax return is probably one of your least favorite things, but it’s not optional. As the tax season approaches, and you start getting ready for it, read on to know the main things you should do to not make common mistakes.
If you are one of the people who feel overwhelmed when filing your taxes, you know that this can cause you to make mistakes.
For many people, filing taxes can be very overwhelming and complicated, and being burdened with filling out these forms can increase the chances of mistakes.
Therefore, it is important that you pay close attention to this process and do it very carefully.
These 5 mistakes are very common when filing your taxes and you should avoid them:
1 – Submitting your tax return on paper
People who fill out paper forms have been found to be 20 times more likely to make a mistake, as reported by Yahoo, so you'd better try to fill out digital.
This way, in addition, you make sure to receive your refund faster and it has also been the way to be among the first to receive stimulus checks.
2 – Entering the wrong social security number
This may seem like a small thing, but it is an essential step, and avoiding this very common mistake is very simple. You just have to have your Social Security card on hand and double-check that you have entered the number correctly before submitting your form.
3 – Entering the wrong marital status
Filing the correct tax status is important because it determines what you're eligible for when it comes to claiming tax credits and/or deductions. It also helps you determine how much tax you owe.
The five statuses you can choose from are: Single, Married filing jointly, Married filing separately, Head of household, and Qualified Widow € with a qualifying child.
Mistaking your status can add up to lost opportunities for getting a bigger tax refund.
4- Missing out on tax credits
Taking advantage of tax credits is important. A tax credit, for instance, can help reduce what you owe in taxes for the year on a dollar for dollar basis, they are a credit against the amount of tax owed. That may sound like a tax deduction, but it's not. Deductions are amounts you can subtract from your taxable income for the year.
Some of the most valuable tax credits include: Child and Dependent Care Credit, Earned Income Tax Credit, or Savers Tax Credit, for example.
You must avoid missing credits by researching which ones you’re eligible for. Each tax credit has its own eligibility rules and they also differ when it comes to how much each credit is worth.
If you feel you are not prepared to do this yourself, online tax preparation companies can review your information and tell you which credits you might be missing out on.
5 – Getting the sums wrong
This error is very frequent, and it is very easy to make mistakes with numbers. So go over the accounts a couple of times to make sure everything is in order.