The I.R.S. sees a lot of tax returns. People make mistakes. You can see where I'm going with this: People screw up on their tax returns. Some of these errors are easy to avoid, while some are more complicated. Regardless of how minuscule or how severe, your life is affected through stress, the cost of time, fees and maybe even jail time. Using a tax preparer or electronically filing through a website are the best ways to avoid these errors. Even if you use a preparer, file yourself or file electronically you still need to be aware of the most common mistakes people make preparing their taxes, as listed by the I.R.S.
First, incorrectly filing your relationship status can kill your eligibility for several exemptions. Some of these exemptions are the child tax credit, the earned-income credit, and exemptions for dependents. Your marital status is determined as of December 31. Anything before that date is irrelevant for tax purposes. You can file either jointly or married filing separately.
Next, people mess up a lot on omitting or using incorrect social security numbers. The numbers you use not only for yourselves, but also for your dependents must match their social security card numbers. Otherwise the computer will reject your credits and even deductions! This can be done both ways, as sometimes even the I.R.S. can improperly input social security numbers.
The most easy mistake people make is failing to sign and date the return. Both spouses must sign the return, and it must be dated correctly to even be considered filed. Not filing on time because of a simple mistake like that can still result in all kinds of penalties, loss of return or even perjury. The I.R.S. will notice, trust me.
The paper trail is another avenue people can screw themselves out of. Receipts can mean more savings and are concrete proof for deductions. Their fragility is their undoing though, as you can easily lose proof of your expenditures if you do not handle your paper trail effectively. All charitable organizations you make donations too need to have some kind of written proof you actually gave to them to write off on your taxes. Paperwork to prove property tax and mortgage deductions also are required to reap the benefits.
Finally, this list would not be complete without a good old failing to report all income. Some incomes can't be recorded on a W-2 or a 1099. Just because it isn't recorded, definitely doesn't mean you don't have to pay taxes on it. In fact, not reporting income will flag you for an audit, and your receipts and bank deposits will be seized. Not reporting these incomes also comes at the steep price of criminal sanctions and even jail time.
These are not the only miscalculations or errors you could make. I'm sure the list could go on for as long as there is information to be put on the returns, but these are the most common mistakes we make filing our taxes. Knowing these and educating yourself to take the time to double-check your information, and using a reliable tax assistant or program to file electronically will more than double your chances of having a successful return. For electronic filing use Online Tax Pros! Electronic filing is the wave of the future, and can get your return faster and easier than regular filing, at a better price than having a preparer file your taxes for you.