April 15 is looming.
Missing the tax deadline would be a big blunder. But even if you file on time, mistakes can still cost you big time.
The chance of having to pay the IRS for an avoidable error is not worth it. Here are some of the most common tax mistakes and how to avoid them:
Mistake No. 1: Stress. Some people become so tax stressed, they don’t take the time to check the simple stuff, says Erik Lammert, a tax researcher for the National Association of Tax Professionals. Making the check payable to the IRS, rather than the United States Treasury, is a common example. Another is forgetting to write the names and social security numbers of your spouse and dependents.
Mistake No. 2: Adding an extra spouse on your filing. When you add exemptions for yourself and your spouse, there’s no reason to add your husband or wife as a dependent as well. The IRS could interpret the error as a statement that you have two spouses.
Solution: Remember. your children are more likely to be dependents than your husband or wife.
Mistake No. 3: Arithmetic errors. Even the most experienced filer can make an addition or subtraction mistake. However, that mistake can ultimately cost you if the IRS catches you (and they probably will).
Solution: Have someone else check your math. Go over your income and expenditures with someone you trust and do the figures separately again. If you’ve made a mistake, there’s a good chance someone looking over your shoulder will catch it.
Mistake No. 4: Putting info in the wrong place. Make sure you entering income, deductions and credits on the appropriate lines. Going back and forth from your W-2, 1099, and 1098 (if you’re a homeowner) can be confusing.
Solution: Treat your taxes like the SATs: Find a quiet place to work, carry two sharpened number 2 pencils and scratch paper, take a deep breath before you start and, above all, pay close attention to what you’re writing and where.
Mistake No. 5: Forgetting to sign and date the return. The IRS cannot issue a refund unless your filing has been signed and dated.
Solution: If you’re filing a paper-based return, be sure to put the signature and the date of your filling down before you do anything else. If you’re using Turbo Tax (Stock Quote: INTU) or another kind of tax preparation software, make sure that you follow the instructions to sign electronically before you log off.
Bottom Line: Taking some extra time now to focus on your taxes will save you time and money in the long run.
—For the best rates on loans, bank accounts and credit cards, enter your ZIP code at BankingMyWay.com.