With less than two weeks to go before the Tax Man comes around, people who have yet to file are scrambling to get their receipts and W-2s in order as quickly as possible.
With so many people in such a mad rush to get their returns out the door, mistakes are bound to happen. And mistakes on the most important documents you’ll file all year aren’t exactly the kind you want to make.
With that in mind, we at MyCreditGroup have put together a list of some of the most common tax mistakes consumers make, and how to avoid them:
Forgetting to file on time
According to the IRS, up to 20% of Americans wait until the last week to file their taxes, so if you haven’t filed yet, you’re certainly in good company.
That said, waiting until the 11th hour to file your taxes can cause a lot of unnecessary stress as you race to gather your financial records together and try and make sense of them all; which can be stressful enough without having to worry about a looming deadline.
Consumers who end up missing the April 15th deadline can expect the IRS to start hitting them with interest payments (which are compounded daily) as well as penalties for filing late, which vary based on how much you owe and how late you filed.
So if you don’t want to end up paying the IRS even more than you may already owe, you might wanna start prepping your tax information NOW.
Forgetting to carry the 1
I have a confession to make: I’m absolutely horrible at math. Pretty much any task that involves number-crunching (or really numbers in general), means I’ll be needing a calculator to help me through it.
That’s why tax software is one of the better ideas man has come up with, much like the trusty calculator. Those of us having to figure our taxes out on our own suddenly don’t have to worry so much about forgetting to carry the 1 – assuming we’ve got the rest of our numbers in the right place, that is.
While some mistakes can work in your favor, such as receiving a bigger return than expected, it can just as easily turn sour, such as you owing the IRS more than you thought. So make sure you double check your work before you mail your tax forms in.
Shredding your older tax returns
I’ve got a box full of old files that I’ll probably never look at again; most of it stretching back further than I care to remember.
If you’re smart, you have at least a drawer full of similar documents, hopefully containing your past tax returns as well. If you’ve ever found that you’ve messed up on any of your back taxes, you’ll need these to help set your records straight.
Not filing at all
We saved the biggest tax mistake you can make for last.
No one likes the thought of having to pay taxes. Paying the government more hard-earned money out of your own pocket? Yeah, I can see why no one’s lining up for that…
Still, while taking the time to file your taxes is almost as fun as paying a bunch of old parking tickets, it’s not something you can skip out on, either. If you don’t file your tax return(s) because you don’t want to have to pay the Tax Man, you’ll only be hurting your wallet in the end.
Thankfully, the IRS offers options to file applications for extensions (for up to six months) and payment plans for those who are worried about breaking the bank to pay their taxes. Both go a long way towards making filing your taxes just a little less painful if you didn’t save the date.
Keep these tips in mind when you sit down to do your taxes, if you haven’t already, and you’ll be with one less worry.
This is a guest post from Marc Chase, President of Product Development for MyCreditGroup, a leading credit repair services company.