Avoid these common tax mistakes!

Tax forms can be tricky, which you know when you need to file more than a 1040EZ. There are some common mistakes that people often make on income tax returns. Listed below are the most prevalent.

• Forgetting to sign and date your return – Probably the simplest part of your tax return is signing it (either electronically or on your paper forms). Yet year after year, this is one of the biggest issues the IRS sees on returns. Don’t forget to sign and date your return, and remember, if it’s a joint return, both spouses have to sign and date it.
• Incorrect filing status – Your choices for filing are single, married filing jointly (MFJ), head of household (HOH), married filing separately (MFS) or qualifying widower. Often, people will claim head of household when they’re not truly qualified to choose that status. Also there are special rules for MFS when you have lived separately from your spouse for the entire year. You can find out your correct filing status by answering a few questions on the IRS website.
• Typos in social security numbers and names – Carefully check all the names and social security numbers on your return. It’s easy to hit a wrong number or letter and have your whole return rejected for a little error.
• Not reporting all your income – Be sure that you have accounted for all of your income for the year, even small earnings from a 1099, rental income, a part-time job W-2 or self-employment income. Also remember that even if you don’t get a document from the payer, you are still required to report the income. If you don’t properly report all of your income, you can face penalties and interest down the road.
• Claiming dependents who are not eligible – You can claim a child or other relative as your dependent, but you can generally not claim your spouse. Learn more about who qualifies as a dependent on the IRS website. Also some surprising people may qualify as dependents. You don’t want to miss one you to which you are entitled.
• Failing to file – Always file an income tax return, even if you don’t owe additional tax at the end of the year. If you’re owed a refund, you will forfeit it if you don’t file within three years. If you do owe taxes, you will be assessed penalties and interest for failing to file. Remember there are separate penalties for both failure to file and failure to pay.
• Not paying and reporting payroll taxes – If you have in-home help like a nanny, a caregiver or a house cleaner, you need to report and pay payroll taxes if they’re making above a certain income.
• Forgetting the Earned Income Credit – Low to moderate income working individuals and families may be eligible for this tax credit, though many overlook it when filing. Find out if you qualify by checking the IRS website.
• Forgetting the Alternative Minimum Tax – There are special deductions and credits for certain types of expenses. The alternative minimum tax ensures that anyone who receives those tax advantages pays at least a minimum amount of tax. You can find out on the IRS website if you should be reporting and paying AMT.
• Using incorrect forms – With all of the tax forms out there, it’s easy to see why people may get confused when it comes to filing. Carefully read the instructions and guidelines for each form to make sure you’re using the correct ones.

If you’re in doubt about which forms to file or what tax credits you may be eligible for, contact Myerson & Myerson, CPA’s for assistance. Getting professional advice may save you money and prevent potentially costly mistakes.

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