Doing your taxes yourself can be frustrating, but with the right knowledge and proper guidance, this task can become simple enough for everyone. There are millions of articles online that tell how to file your taxes. But today, in this guide, we’ll share with you insights on seven common tax filing mistakes to avoid when filing online. So, without further delay, let’s get started.
Mistake #1: Not verifying your information
Make sure to double-check all the information you enter on the tax filing portal. This includes your personal information, social security number, address, bank details, account statement, tax slips, and more. Also, verify that the information from your prior tax year details is accurate. Review each form and document carefully, ensuring they are correct before submission.
Mistake #2: Not claiming all eligible tax credits and deductions
There are so many tax credits and deductions that it becomes nearly impossible to keep track of them all. For example, the Earned Income Tax Credit (EITC) can offer a major savings opportunity for people and families with lower to moderate incomes, while the home office deduction allows certain self-employed taxpayers to deduct part of their home office expenses. Therefore, it becomes extremely important to research before filing your taxes to claim all available benefits. The best way to find the right tax credits and deductions is to learn about their eligibility.
Mistake #3: Not reporting all your income
If you have multiple income sources, make sure to have all your forms ready in advance, clearly outlining your income sources. While traditional income sources are easier to track, non-traditional income can be tricky sometimes. (Traditional income includes wages from jobs like doctors or engineers, while non-traditional income includes earnings from cryptocurrency or side hustles.) However, regardless of the number of your income streams, it's important to report all your income when filing taxes to avoid future issues.
Mistake #4: Not keeping up with the tax laws
It's always been a good idea to stay updated with the current tax rates and double-check the deduction limit for any major breakthrough. To stay updated with such information, take regular insight from financial blogs, news, and newsletters throughout the year or especially in the tax season. It's good when you're familiar with the daily tax situation; it can boost your morale and help you avoid the last-minute rush to meet deadlines.
Mistake #5: Making math mistakes
Making math errors is quite common on tax returns, and it can cause various issues. For example, it can delay processing and result in incorrect tax amounts. In some cases, even a simple mistake can lead to problems like extra review and future complications. These errors can also delay your refunds and cause issues with incorrect filing. Just like any other form, you are solely responsible for entering the correct information into your tax file.
Mistake #6: Not claiming the correct dependents
Make sure you carefully review the dependents' eligibility. Ensuring this can bring you certain tax breaks to your advantage. Claiming all eligible dependents can significantly reduce your tax bill. Before claiming your dependents, ensure you are not making any incorrect claims, as this can lead to issues with both your return and potentially theirs if they’re required to file.
Mistake #7: Not telling the IRS what to do with your refund
If you’re a taxpayer expecting a refund this year, congratulations! However, if you don’t provide the correct bank and routing information to the IRS or your tax preparer, you’ll need to wait about six to eight weeks to check your status again before receiving the refund. But if you choose direct deposit, you’ll get the refund in approximately 21 days, according to the IRS.
Conclusion
Filing taxes is an important task for any individual. Therefore, everyone wants to make sure that filing taxes online is easy. If you are one of those people, then we must inform you that it’s not as complicated as it seems. Anyone can do it if they stay updated with the correct and latest tax information and avoid the mistakes we mention in this guide. From verifying your information to telling the IRS what to do with your refund. If a person can manage these terms effectively, they are likely to succeed when filing taxes online.
