5 Tax Mistakes To Avoid Before April 18th

February 22, 2011, By Steve Thompson 0 comments

Taxes have always made me nervous because there are dozens of ways for me to screw up my filing. Even when I use a tax preparer (every year for the last decade, just about), I'm not confident of missing a crucial error or tax secret. And if you want to avoid the wrath of Uncle Sam, there are a few common mistakes you can avoid right out of the gate.

1. Claiming Without Documentation

It might not seem like a big deal that you lost your receipt for your new home office computer, but documentation is essential for any deduction you plan to take. The IRS tends to look more closely at the returns of individuals who claim lots of deductions, so make sure your paperwork is in order.

I keep legal-size expanding file folders for all my receipts. They are labeled by year and each file is separated into twelve pockets: one for each month. Every receipt I bring home goes into this folder so that, at the end of the year, I can sort out the receipts I will need for deductions.

2. Miscalculations of Rebates & Credits

Since the 2008 tax year, the average consumer has had difficulty calculating rebates and credits on their tax returns. It makes sense. There's lots of misinformation online, and it can be difficult to sort out exactly what you are able to get back.

The best course of action is to visit the IRS website and follow the instructions they give for the rebate or credit in question. You can also call the IRS or ask your tax preparer if you aren't sure you've claimed the right amount. This can save you significant headaches down the road.

3. Missing Lines

Skip to line 10 if this does not apply. Skip line 8 if this and this are true. Tax returns can make just about anyone's head swim. This is why, when filling out your tax returns, you should read every line carefully to ensure you don't miss a step. Then go back over it to double-check your work before sticking it in an envelope.

I double-check my returns regardless of who prepares them. It gives me peace of mind because I know my accountant isn't perfect.