No one looks forward to filing their taxes. Filling out those forms isn’t just annoying—it’s incredibly time-consuming. In fact, the average American taxpayer spends more than 13 hours filling out their returns.
For business owners, that average time almost doubles.
The faster you try to file, the easier it is to make mistakes. Unfortunately, those mistakes will cost you in the long run, but you can avoid making them.
You just need to know which common mistakes are the most troublesome and how to avoid making them when filing your taxes. Here’s what you need to know.
Not Checking Your Personal Information
When you file your taxes, you have to enter your personal information on the form. This is how the IRS keeps track of your tax return and processes everything accurately. If you make a mistake on any of those fields, it can take weeks to correct the problem.
The longer you have to wait to correct the information, the longer you’ll wait to receive your tax refund.
Before you submit your return, double-check the information you filled out. Review your name and address. Look at your bank account number and routing number to make sure they’re accurate.
These simple steps will help you avoid the most common delays and makes it easier for the IRS to process your return quickly.
Submitting Your Return Without Reviewing It
Though the accuracy of your personal information matters, it’s not the only thing you need to double-check before submitting your return. You also need to review your math and make sure everything adds up correctly.
Go line by line and calculate each field again. If you notice any issues or find numbers that don’t make sense, run through them again and make the necessary corrections.
Do this even if you hire an experienced accountant. Remember, mistakes happen and the last thing you want to do is submit those mistakes to the IRS. When you do, it increases your risk of an audit and makes your return take longer to process.
If you notice any issues with the return after you file, don’t let it sit. Contact the IRS as soon as you can and let them know about the error. They’ll help you figure out how to fill out an amended or corrected return so you can avoid costly fees.
Ignoring the Deadlines
One of the biggest mistakes people make is not keeping an eye on the tax filing deadlines. Individuals filing taxes as an employee only have to worry about the main tax filing date of April 15th. But business owners, entrepreneurs, freelancers, and self-employed individuals have more on their plate.
They also have to worry about filing quarterly estimated taxes throughout the year.
If you miss a payment or don’t pay enough toward your estimated taxes, you risk facing late fees and 1099 penalties. Depending on the severity of the issue, those fines could cost you thousands of dollars.
Get in the habit of checking your calendar and make sure you submit your taxes by the appropriate deadlines. If you think you’re going to be late with anything, don’t panic. Just contact the IRS and request an extension.
As long as you communicate with them and have a valid reason for requesting the extension, they’ll likely grant it to you.
Not Reporting Your Entire Income
When you file your taxes, you have to enter your personal information on the form. This is how the IRS keeps track of your tax return and processes everything accurately. If you make a mistake on any of those fields, it can take weeks to correct the problem. If you need a bit of help, luckily TurboTax Live can connect you with tax experts and CPAs online from the comfort of your own house in Cleveland or any other town/city in the USA. Your income isn’t just the wages you earn from your main job. It includes things like investment returns, side gig earnings, gambling earnings, and even cash tips.
In many cases, you’ll receive a 1099-MISC form for that miscellaneous income earned. This makes it easy to total up your income for your tax return. But keep in mind that you still need to report the income you earn even if you don’t receive a 1099-MISC form in the mail.
Failing to Research the Right Deductions
The standard deduction works for most people and can help them save money when filing their taxes. But it’s not always the best option.
You need to research the types of deductions available and make sure you’re claiming the ones that you qualify for. The more deductions you’re able to take, the lower your taxable income will be. This means you’ll owe less to the IRS when you file.
If you’re not sure which deductions are right for you, consider working with an accountant. They’ll be able to look at your situation and identify deductions you might not otherwise know about.
Throwing Out Copies of Your Return
Whether you’re filing as an employee or as a business owner, you need to keep copies of your returns on hand. This way, you’ll be able to provide the IRS with copies of your returns if you ever get audited.
Do yourself a favor and hold onto returns for at least three years. If you’ve already thrown out copies of your older returns, you can still request duplicates from the IRS.
Forgetting to File at All
Believe it or not, some people completely forget to file their taxes at all. Worse, some do this for years on end.
Don’t fall into the trap of forgetting to file your taxes. If you do, you’ll owe the government taxes for each year you miss as well as expensive late fees.
Keep an eye on the deadlines and make sure you file your taxes every year.
Avoid These Mistakes When Filing Your Taxes
Accuracy matters when filing your taxes. Don’t hesitate to take your time, review each line on the form, and make sure everything gets entered accurately and on time. This way, you’ll be able to avoid these common mistakes every time you file.
Just remember that it’s okay to ask for help. If you ever feel overwhelmed, talk to an accountant, a business advisor, or even the IRS itself. They’ll be able to give you the guidance you need to keep mistakes from happening in the first place.
Looking for more tips to help you improve your tax filing efforts? Check out our blog for more tips and insight into keeping your finances in order.