2020 is nearly over, and we can all agree that the year was not only deeply strange but also one that flew by with remarkable speed. This means that, regrettably, tax season is almost upon us, and we need to begin organizing our paperwork and financial records more thoroughly so that we are ready to file on time. It is also important to circumvent the common mistakes that often trip us up when filing for taxes so that we don’t underpay or overpay. The following are a few quick tips on the things you need to avoid to ensure that you submit your taxes in a pristine manner.Four of the most common Tax Filing Mistakes that you need to care about so you never make them. Tax season doesn’t have to be stressful.
Top 4 Tax Filing Mistakes
Messing Up Your Tax Filing Status
This is a fairly common mistake, but choosing the wrong status ends up dictating how much you pay on your income and the kinds of credits or deductions you are entitled to. If you are married but filing separately, or single, head of the household, or married and filing jointly with your partner, you will need to list this clearly. You can only choose one status, so make sure to choose the right one. Failing to do so may result in not getting the tax refund you are owed, or you may be forced to pay extra in taxes, depending.
Using the Wrong Social Security Number
This is another surprisingly common mistake. Your social security number is the most important identifier you have, so messing up here can end up in a major headache down the line. If you think you somehow already made the mistakes after filing, then look into the best tips to amend tax mistakes. Since this is a common error, you will find an accountant who will help rectify the situation right away.
Not Reporting All Your Income
You may think that that paltry sum you receive from your side gig to be fairly inconsequential, and will in turn forget to mention it in your taxes. Any seemingly random 1099 form you may have received from the bank needs to be reported; don’t just toss them aside. In the end, this will make a huge difference in how your income is accounted for, in relation to how much in taxes you should spend.
Not Filing Online
Just a few years ago, it seemed that we were all filing taxes with relative ease using the old fashioned paper application. No one really thought about filing online. Old habits can be hard to break, but you should know that sending in a paper application all but ensures that you will be inputting a ton of errors. It’s hard to keep track of your inaccuracies, whereas online, the system sort of blocks you automatically from making small mistakes through the clear layouts. It also notes if something you added on one page does not clearly add up on another, so it will force you to go back to make corrections. The moral of the story? Consider moving all of your tax filings online.
Given how horrid this year has been for pretty much everyone, the last thing anyone needs is a major financial mistake showing up on their tax filings. Every little bit helps, and it is best to make sure that everything has been done properly and that these small yet ultimately stressful mistakes are avoided.