tax mistakes

5 Mistakes to Avoid When Filing Your Taxes

The process of filing taxes may be intimidating and difficult, and if you’re not cautious, you might make a mistake that costs you. Every year, it’s the little things that cause taxpayers to pay more than they should.

5 tax mistakes people frequently make and how to avoid them

Filing your taxes late

You don’t want to miss the deadline for submitting your taxes. Missing the deadline isn’t only a frustrating error; it’s also a costly one.

Here’s why.

  • You’ll be charged 0.5 percent of the outstanding debt every month, up to a maximum of 25%.
  • If you have a Failure to File Penalty and a Failure to Pay Penalty in the same month, you will have a total penalty of 5% for each month or even part of that month, that your tax return was late.
  • Interest is charged on both the overdue tax and the penalty.

The best way to avoid extra cost and stress is to simply plan ahead and prioritize your taxes. If you missed the deadline due to unforeseen circumstances, you should request an extension as soon as possible.

The Top 5 Accounting Mistakes Startups Make

Inputting wrong numbers

One of the most common errors people make is entering incorrect numbers on a tax form. We’re not talking about a miscalculation; we’re talking about incorrectly inputting the numbers. It happens! It’s important to check and double-check your bank account information and other figures when filing your taxes.

In addition to the cost, you will have a hard time requesting a direct deposit refund if your information isn’t correct. You’ll have to undergo a thorough verification for the system to confirm your identity and to correct the mistake you made.

Filing with an incorrect name

Greetings to the newlyweds! Although it’s common for a spouse or partner to assume a new last name when getting married, it is important to inform the IRS first before using it. One mistake many people make when filing taxes is the mismatch of names due to a change in status. Couples who have recently gone through divorce are not exempt either and must also notify the Social Security Administration for a name change. Some people even accidentally misspell their name.

If your name and Social Security number do not match those on file with the IRS, your tax return may be denied or the process halted. If you are experiencing this situation, here are some ideas to keep in mind to help you deal with the problem.

  • Always double-check your return for mistakes.
  • If you submit a joint return, ensure that the SSN you provide is for the primary taxpayer.
  • Notify the Social Security Administration to get your Social Security number changed to your new name.

If you haven’t reassigned your number to your new name, you can just use the name that matches your number.

Forgetting to sign

Forgetting to sign the bottom line is an all-too-common mistake. While you will not be penalized at first, you will experience a delay in getting any expected return. And if you owe taxes and wait until the deadline to file, neglecting to sign the return might result in a late charge and penalty. If you forgot to sign the form, then you haven’t filed with the IRS, as far as the IRS is concerned.

Don’t allow a few careless errors to cost you money. Spending minutes double-checking your return might result in more money in your bank account when you need it.

Filing too early

While it’s not a good idea to file taxes late, you shouldn’t file too early. There may be tax deductions opportunities you could miss if you do not include all the financial documents needed when you file your taxes.

The bottom line

Whether you owe money or are waiting for a tax return, stress levels tend to rise around this time of year. Tax anxiety and the ongoing worry about filing taxes can affect your day-to-day life.

If you are stressed, you are more likely to make mistakes. And mistakes could result in missing out on the refund to which you’re entitled. The best way to avoid errors and keep more of your hard-earned money is to continue to learn about your finances and take the time to fill out all your forms very carefully. Take note of the common mistakes we just talked about and double-check your work before you file your taxes.

StartupNation exclusive discounts and savings on Dell products and accessories: Learn more here.

Previous Article
wjr business beat

WJR Business Beat: Snow Removal is Big Business (Episode 354)

Next Article
change management

Change Management Helps Achieve Business Goals

Related Posts
supply chain
Read More

How to Keep Vendors and Clients Happy During Supply Chain Hiccups

Supply chain breakdowns are happening due to global disruptions, rising costs and increased consumer expectations. Businesses can't always stop supply chain hiccups, but they can learn from them and limit their impact on vendors and clients. How a business responds to a supply chain issue can have far-flung effects. A company that is proactive and...
Read More

How to Support Employee Mental Health and Avoid Startup Burnout

When it comes to finding the right job — and staying there — candidates are looking for a lot, especially in a virtual setting. Gone are the days where foosball tables and free snacks constituted benefits. Of course, we still love them, but there has to be more that matters. People are primarily looking to...
top fintech startups
Read More

Top Fintech Startups in the Midwest 2022

The Midwest is rapidly becoming home to some of the best fintech startups in the country. Chicago, for instance, is becoming a top tech hub for fintech startups, seeing massive growth and funding for its companies. In Columbus, the city’s long history with top banking institutions has created a fertile ground for fintech startups to...
startup team
Read More

5 Strategies for Building a Great Startup Team

The way you treat your employees, their time, skills and abilities in the early phases of your union as a team influences the rest of your company's course of action. Mark Zuckerberg once said, "The most important thing for you as an entrepreneur trying to build something is, you need to build a really good...