Many tax return filing mistakes can be made, and it is important to be aware of them so you can avoid making them yourself.
This blog post outlines some of the most common mistakes and provides information on how to correct them.
Making a mistake on your tax return can result in penalties and interests from the IRS, so it is important to file correctly and avoid these costly mistakes.
Top 10 Tax Return Filing Mistakes to Avoid
When filing your tax return, it is essential to be aware of the common mistakes that can be made. If you make a mistake, it could cost you time and money.
Avoiding these mistakes can help ensure that your tax return is filed correctly and that you do not incur any penalties or interest from the IRS.
1. Not filing a tax return
You must do so if you are required to file a tax return. If you don’t, you will be charged late filing penalties, increasing your chances for an audit.
The deadline for filing your tax return in 2022 is April 18. If you do not file by that date, you will be charged late filing penalties. Make sure to file your return on time to avoid any additional costs.
Additionally, if you cannot file on time, you can point and request an extension til October 17, 2022, to file.
2. Failing to report all of your income
When it comes to tax time, one of the most important things to remember is that you are responsible for reporting your income.
This includes income from various sources, such as wages, interest, dividends, and capital gains.
Not only could failing to report any income result in penalties, but you may also be subject to an audit by the IRS. Some people usually get audited and realize they owe taxes on unreported incomes. They have to pay penalties and interest.
Make sure to include all sources of income on your tax return and be prepared to back up those amounts with supporting documentation.
3. Filing a tax return late
As mentioned above, the IRS has a strict deadline of April 18th, 2022, for filing your tax return.
If you fail to file by that date, you will be charged late filing penalties. The penalty is 5% of your unpaid taxes for each month or part of a month that your tax return is late, but it can’t exceed 25% of the unpaid taxes.
If you file an extension, the government will give you more time to turn in your taxes past the usual deadline.
In 2022, filing an extension allows you to file without penalties until Monday, October 17th.
However, it is still important to file your return by the extension deadline of October 17th, 2022
4. Wrongly claiming deductions or credits
On your tax return, you may be eligible to claim certain deductions or credits. This can help reduce your tax liability or increase your refund amount.
However, ensuring that you are claiming only the deductions and credits you qualify for is crucial.
Claiming a deduction or credit when you do not qualify can result in an audit by the IRS and potentially lead to fines or other penalties.
5. Making math mistakes on your tax return
Tax forms are full of numbers, so it’s important to double-check your work and make sure that all the math adds up correctly.
Additionally, ensure that you report the correct information for each line item.
An incorrect calculation can lead to an audit or result in a delay in processing your return.
Review each section carefully before submitting your tax return to avoid any issues.
6. Forgetting to sign your tax return
The signature area on your tax return is not just a formality—it’s an important part of the filing process.
Without it, your tax return will be rejected, and you will have to start the process again.
Take the time to ensure both spouses sign, if applicable, that your signature is legible and accurate.
This will help ensure your tax return is processed quickly and without issues.
7. Filing taxes incorrectly for multiple years in a row
If you have missed filing errors for multiple years, the IRS can correct mistakes from past tax returns
This could result in hefty penalties or additional taxes due.
To avoid this situation, make sure that your tax returns are accurate from year to year.
Double-check all the information before submitting, and look for any tax law changes that could affect your return.
8. Not keeping records of what you spent during the year
It’s essential to keep detailed records of your income and expenses throughout the year. Doing so can help you maximize deductions when filing your taxes and give you an accurate picture of your financial situation.
These records can also be valuable if you are audited. Make sure to keep all invoices, receipts, and other documents that support the amounts reported on your tax return.
9. Choosing the wrong filing status
When filing your income tax return, choosing the proper filing status is crucial. The wrong filing status could result in you owing more taxes than you should or even getting audited by the IRS.
There are five filing statuses to choose from:
- Married filing jointly
- Married filing separately
- Head of household
- Qualifying widow(er) with dependent child
Choosing the wrong filing status results in an incorrect tax return.
Select the correct filing status for you and your family, as this will determine which credits and deductions you are eligible for.
10. Being unaware of changes in the tax law that could affect you
Tax laws can change yearly, and it’s important to stay up-to-date with any changes that could affect your tax return.
Knowing the current tax law will help you avoid costly filing mistakes and ensure that you file correctly and pay the right amount of taxes.
It’s a good idea to research tax law changes before filing your California tax returns.
This could help you maximize deductions and credits and ensure that you file accurately and on time.
Remembering these common filing mistakes can help you avoid costly errors when preparing and submitting your California tax returns.
Don’t let mistakes on your California tax returns cost you money. Make sure to double-check your work, keep accurate records of your income and expenses, and stay up-to-date with any changes in the tax law that could affect you.
Filing accurately and on time will save you money and hassle in the long run. Subscribe to our blog for helpful tips on tax returns and other financial matters.