Your tax paperwork is no place to make mistakes, especially costly ones. Here is a list of 15 common errors to look out for when completing your taxes this year.
The following material is excerpted with permission from The Ernst & Young Tax Guide.
- Most importantly, check your math.
- Double-check that your Social Security number has been correctly written on the return. If you are married, check that your spouse’s Social Security number is properly listed, whether filing a joint or separate return.
- Include your Social Security number on each page of the return so that if a page is misplaced by the IRS, it can be reattached.
- Check that you have claimed all of your dependents, such as elderly parents who may not live with you.
- Include on the return the Social Security numbers for all dependents including those born during the year.
- If you are single and have a dependent who lives with you, check to see if you qualify for the lower tax rates available to a head of household or surviving spouse.
- If you are married, check to see if filing separate returns rather than a joint return is more beneficial.
- Be sure to sign your check and write your Social Security number, the form number and the tax year on the face of any checks made out to the IRS (example: “000-00-000 – Form 1040”).
- Be sure that your Form W-2 and all Form 1099s are correct. If they’re wrong, have them corrected as soon as possible so that the IRS’s records agree with the amounts you show on your return.
- If you worked for more than one employer and your combined wages exceeded the maximum amount taxable for Social Security ($90,000 in 2005), be sure to claim a credit for any overpaid Social Security taxes withheld from your wages.
- Fill out Form 8606, Nondeductible IRA Contributions, for your contributions to an IRA account, even if you don’t claim any deduction for the contribution.
- Recheck that you have used the correct column in the Tax Rate Table or the right Tax Rate Schedule for your filing status.
- Don’t miss deadlines: December 31 to set up a Keogh plan; April 15 to make your IRA contribution; April 15 to file your return or request an extension. Check the tax calendar periodically.
- If you regularly get large refunds, you’re having too much withheld and, in effect, giving an interest-free loan to the IRS. Changing the number of allowances you claim on your W-4 form will increase your take-home pay.
- Keep copies of all documents that you send to the IRS. Use certified mail for all important correspondence to the IRS. Don’t forget to keep your records in good shape so that you can find answers to any IRS questions about your return.
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