With a little more than a month left before tax returns are due, you may be gathering your documents and getting mentally prepared for a long afternoon of assembling your return. If you own a business, own investment properties or have other complex income, you already know the frustration and confusion you may face.
Part of that frustration is the worry that you may make a critical mistake. Mistakes on your tax return can require more work as you track down additional documentation, delay your refund or put you at risk for an audit by the IRS. Identifying the most common mistakes is the first step in helping you avoid them.
Common mistakes taxpayers make
You have many options for assistance in preparing your returns, but as your financial life becomes more complicated, you may be less likely to trust just anyone with something so delicate. However, whether you do your taxes yourself or use a service, you want to be sure you have all the information you need and that your information is accurate. Some of the most common errors tax payers make on their returns include the following:
- Filing under the wrong status
- Transposing numbers or rounding when copying your income from your W-2 or other tax form
- Using incorrect Social Security numbers for yourself, your spouse or your dependents
- Incorrectly entering your bank's routing or account numbers
- Miscalculating your eligibility for tax credits
In fact, in many areas where credits or deductions are available for people who qualify, tax payers frequently make mistakes. For example, you may claim your charitable deductions, but you may not make this claim unless you are itemizing.
When things get complicated
Many tax payers who have investment income become confused about what to do with that information. You must include any data from a 1099 on your return. You will find it helpful to keep accurate records throughout the year rather than relying on the 1099 for those details. Additionally, you would certainly benefit from the advice of a California tax professional if your taxes include these often-confusing elements.
Online programs and cubicle preparers can only do so much for you, especially if you have complex tax issues. Finding a tax attorney who is up to date on all the latest codes may be in your best interests for the most accurate and thorough completion of your returns.