If it's that time of the year again and you're busy completing all the complicated tax return forms, remember to check and double check all your information before you file. Unfortunately, errors are a common occurrence and can end up costing you a pretty penny. Not even the IRS understands the tax code completely and the IRS commits its fair share of mistakes as well, so you're not always at fault. Some of the common mistakes the IRS commits include sending a check for the wrong amount or not sending a check at all.
Married or Single?
Tax returns are calculated according to your status on the last day of the year, December 31. For example, you are filing tax returns for 2012 and you got married in January 2013. You might want your married status to be reflected in your tax documents, and so you claim you are married when filling in the form. Unfortunately, you have just committed an error because you were single in December of 2012.
Another common error is to file separately, despite being married. There is a significant percentage decrease in tax if you file jointly, which can save you a lot of money in the long run.
You don't want to be audited just because you typed in the wrong social security number so make sure it's right before you submit. If you're submitting a paper form, write your social security number clearly. Also, enter the social security number of your dependents just once in the form. If you are divorced, either you or your spouse can claim the children as dependents, but not both of you.
Sign Your Return
A large number of people commit this embarrassing gaffe each year. Not signing your tax return can cause you a headache in the future. The IRS is famous for the enormous backlog it constantly tries to get through. Don't be surprised to get a call from an agent several years later asking why you didn't file your tax return, when, in fact, you did.
Make copies of all the documents that you send to the IRS and keep them in an easily accessible place. If the IRS commits an error, which happens often, you can then send these documents as proof of you filing your tax return properly.
Are you filing in the right amount? It's difficult to keep a straight head after plowing your way through reams of IRS documents. Many people enter the wrong amount, which holds up the tax return process for several days until the IRS corrects the error. You can use tax return software to ensure that you have entered the right amounts on the form, because the program will make the calculation for you.
Before filing, make sure you have attached all the correct forms and determine if you qualify for AMT (alternative minimum tax). If you need to amend your tax return or to pay additional tax, browse the IRS website for the forms you need to complete and return. The processing time for amended tax returns can be anywhere between 8 and 12 weeks.
This article was written by Chase Moreno, an MBA student who hopes to become a financial advisor in the future. For more information on tax return errors, and help with these problems Chase recommends contacting professionals, like those at www.glbtaxservices.com/unfiled-tax-returns
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