4 Common Tax Filing Errors That Can Lead to Costly Delays
Job stress. Economic hardship. Helping kids with homework. Health issues.
So many of us are facing any or all of these issues, so adding the stress of filing your taxes can be oh-so-miserable. With a good deal of knowledge or at least aligning yourself with someone who has this, tax season doesn’t have to be a thing of sheer dread.
Most people think tax time is all about forms and sums. Yet many tax delays are not because of complex calculations. They come from small mistakes that are easy to miss. A wrong digit, a poor pick, or a lost form can slow a tax file for weeks or even more.
However, most of these issues can be fixed with a bit more care before you send your file. Here are some of the most common tax filing errors that lead to costly delays.
Common Tax Filing Errors
1. Incorrect or Missing Social Security Numbers
A wrong Social Security digit can stop a file from going through. Tax staff use this data to match names, tax forms, and past files. If the data does not line up, the file may face a hold or a full rejection.
Many tax preparer mistakes are due to wrong data entry. A digit may be left out, typed twice, or moved to the wrong spot. This is why it is wise to check all data twice before you file your taxes. Many people now also use tax tools from firms such as Intuit to help guide them through the tax filing.
2. Spelling Mistakes
Name spellings matter more than many people think. A small mistake can lead to match issues. If the name on the file does not match the name on the ID cards, the file may be delayed.
Therefore, you must check all names carefully. Pay attention to each word and each letter. A quick look may not catch a typing error that could delay the full process. Small text mistakes can lead to long waits. Therefore, it is wise to take some time now and make sure each piece of data is correct without any spelling mistakes.
3. Wrong Filing Status
Your file type has a huge effect on how your tax file is read. Some people use a file from a past year even though life has since changed. A new spouse, a child, or a change in life can have a huge effect on your filing status.
The wrong pick can lead to mistakes in tax sums and may slow the review path. If you are not sure which file type fits your case, take time to read the rules carefully. A quick guess is not worth the risk.
4. Failing to Report All Income
This is one of the most common tax errors each year. Many people think only of their main pay source. Yet tax files often need more than that. Side work, rent pay, bank profits, and some online sales may all need to be part of the file.
Tax staff often get copies of many pay forms. If your file does not match those forms, a delay may take place. Therefore, you must keep a list of all pay sources as the year goes on. Do not wait until tax time to hunt for forms. Remember, the goal is not just to file, but it is to file with full and accurate data.
More Tips to Make Tax Filing Stress-Free
Get Help!
If you’re a DIY type or if you have a background in finance or economics, pride might get in the way of seeking help from a tax pro.
There’s no shame in getting help from someone whose job it is to stay abreast of the latest tax laws and to streamline the process of filing. On top of their knowledge of the nuanced tax laws, this person will understand the regulations and how to file the proper deductions.
If you attempt to do these things on your own, it’s possible that you could make huge and costly mistakes, so why not get it right the first time?
It’s one thing if you are single with no kids and your taxes are uncomplicated. But those who have one or more homes, children, businesses, and more should hire someone that can help navigate the complicated tax regulations associated with these things.
Not only will this person help to avoid mistakes, but her knowledge could help to save or make you money.
Lastly, she can help you with past IRS tax problems that would otherwise come back to haunt you at this time of year.
Be Overly Organized.
Because being effective with filing taxes requires receipts and other records, organization is key.
This will be particularly helpful if you’ve hired a tax professional, as he will be able to power through your taxes if he’s given all the receipts, records, and books that he needs.
Make sure to file all necessary documents throughout the year. Because physical receipts can easily get lost or damaged, it’s best to be diligent about scanning and storing these online right away.
Don’t Procrastinate.
Many of us are prone to procrastination and, while the urge is totally understandable (especially when it comes to things like filing taxes!), avoiding the rush will help keep your stress at a manageable level. If you’ve ever been at the post office on Tax Day, you know this to be true.
If you have to, you can always research what locations will send off your taxes without having a late postmark. What would be better though is getting a jump on your taxes so that you can e-file. You can do this until midnight on April 15 and, even better, there is no charge.
File an Extension If the Writing is on the Wall.
One thing about taxes that we know for sure is that you need to file them by Tax Day or pay the price—that is, unless you file for an extension.
If you can already tell that this isn’t going to happen for you this year, fill out IRS Form 4868. If you mail it in or e-file this by April 15, the extension will be granted and you will have until October 15.
Make Denial a No-No.
“Da Nile” ain’t just a river in Egypt! Ignoring the fact that you need to file is going to cause more stress in the long run so, if you see that you aren’t going to make the deadline, estimate the amount you owe and file or get that extension.
As the IRS puts it, “In most cases, the failure-to-file penalty is 10 times more than the failure-to-pay penalty. So if you can’t pay in full, you should file your tax return and pay as much as you can.”
Making tax-filing completely stress-free might be reaching for the stars but, if you follow these tips, you should be able to significantly decrease the associated anxiety.
