Tax season is here, and the May 17th deadline is quickly approaching. Filing taxes can be a time consuming and complicated process, particularly for those filing on behalf of another individual. You may be tempted to rush to get them done, but easy mistakes can cause you to miss out on a larger refund, owe more in taxes, or even face an IRS audit.
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It is not only important to get your taxes done on time — you want to make sure they are done right. Check out these costly mistakes to avoid this tax season to help during the filing process.
Not filing your taxes on time
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May 17th is the last day to submit your taxes for your 2020 earnings, and filing even a day late may cost you. Tax payers who do not meet the May 17th deadline are subject to penalties, interest, and additional tax on the unpaid balance.
While individuals are able to file for an extension to buy some extra time, taxes owed by the original deadline still need to be paid. If you are struggling to pay the full bill, file a return and contact the IRS to start an installment payment plan.
Check out "How to stop procrastinating on your 2020 taxes" to help you get started today.
Not filing digitally
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The IRS is currently still catching up on paper returns that were filed in 2020, The Motley Fool reports. While much of the backlog was caused by tax centers closing their doors during coronavirus, it is still a good idea to file electronically this year as well. Filing your taxes online will help reduce any potential errors and expedite the process of getting your refund.
Missing tax breaks available to you
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There are many tax credits and exemptions available for people who were impacted by the coronavirus pandemic. The American Rescue Plan signed into law in March tweaked the child tax credit, earned income credit, and child and dependent care credit, according to CNBC. Take time to review your earnings and new stipulations under the most recent relief package to see if you and your your family qualifies.
Check out "How the pandemic has affected your taxes?" on Audacy to learn more.
Falling for tax scams
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Paying someone to take care of all of the pesky busy work may seem tempting, but it also puts your private information at risk. As part of a hot scheme in 2021, identity thieves are targeting tax professionals by sending emails that appears to be from the IRS, reports USA Today. The phony email refers to “IRS Tax E-Filing” and verifying key e-file information.
The 'Choosing a Tax Professional' page on IRS.gov has information about tax return preparer credentials and qualifications.
Not signing forms
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Forms that are left unsigned are not considered valid. In most cases, both spouses must sign the return. Special exceptions apply to members of the armed forces, or other individuals who have a valid power of attorney. The best way to avoid this error is to complete your taxes electronically and digitally signing the form before sending it to the IRS.
Entering the wrong bank account number
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Filing electronically with direct deposit is the quickest way to get refunds, and can also help some taxpayers quickly receive any remaining stimulus payments they may be entitled to. Double check to ensure your bank account and routing numbers are correct to avoid any delays in receiving your refund.
Entering the wrong filing status
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If you were legally married during the past year, don’t forget to change your filing status from “Single” to “Married Filing Jointly” or “Married Filing Separately.” There are a number of other tax filing statuses, including “Head of Household” or “Qualifying Widower.” If you are unsure of your correct filing status, head to www.irs.gov/help/what-is-my-filing-status to complete a 5 minute survey that will determine your specific filing requirements.
Entering the wrong name name or address
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Anyone who legally changed their name with the Social Security Administration in the past year must file tax federal and state tax returns that reflect the new name. The same rule applies to any who may have moved and now has a new address. A mismatch in personal information may delay the process, and may even cause your return to be sent to the wrong place.
Not double-checking your math
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Don’t test your mental math skills when filing out your tax-related paperwork. Keep a calculator nearby to double check that all of your calculations are correct.
Tax Day 2021 is on May 17 — Get the latest tax season news and updates on Audacy
—How to stop procrastinating on your 2021 taxes
—IRS says face masks, hand sanitizer, and other PPE are tax-deductible expenses
—How has the pandemic impacted your taxes?
—IRS moves tax filing deadline to May 17
—Will my pandemic relief be taxed?
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