In the United States, the average worker pays over 22% of their income in taxes.
This amount can go up or down depending on tax exemptions, knowledge of tax law, and the type of income earned. Mistakes with tax filing can cost the average taxpayer hundreds or thousands of dollars. Avoiding mistakes is critical to not overpaying or owing to the government any more than necessary.
Here are a few tax mistakes that you can avoid:
1. Standard Deduction
If you automatically take the standard deduction, there’s a good chance that you aren’t getting what you’re entitled to. Tax deductions and credits can total up to a lot of money. The first step in avoiding this common mistake with tax filing is to understand the tax code.
You can research on your own, or seek professional advice on what you could be writing off.
2. Clerical Errors
Whether it’s putting a name in wrong or miscalculating, a clerical error can create a lot of trouble. These kinds of errors can lead to audits, or prolonged periods of time waiting to get a tax return. To prevent this either double check everything, have someone else double check or use a professional tax preparation service.
3. Incomplete Filing
It is important to remember that filing tax returns has to be done after all information is received. Rushing to get taxes filed is a common mistake that can lead to larger problems. Those larger problems are that incorrect taxes could be paid, either too much or too little.
If you have an incomplete filing the only way to fix it is to file an amended return. This often prolongs the time you’ll have to wait to get a return.
4. Error With Direct Deposit
When setting up tax returns for direct deposit, a common mistake is not putting in the information right. The routing number and account number are vital, and even a single wrong digit would be a disaster. Avoid this by remembering that the routing number is on the left, and the account number follows.
5. Being Out of Date
The tax code can change at any time, if you don’t use a program or professional service then you have to stay up to date. There are benefits, tax breaks, and types of taxes that expire every year, and some are added. Keep up to date with any changes to the tax code to prevent this from happening.
6. Not Seeking Help
Whether it’s in preparation of taxes or dealing with the IRS afterward, you shouldn’t do it alone. There are programs and services that could save you thousands. If you need help with taxes, try a service like https://taxhostage.com/.
Mistakes With Tax Filing
Anyone can make mistakes with tax filing, the key is to address it and take care of it. Some mistakes can bring penalties that will gain interest over time. Save yourself time, money, and a headache by using a professional tax service for all of your needs.