- Wrong Filing Status
Currently, the IRS divides individuals into five groups, according to their tax status and their requirements for tax returns: 1. Single, 2. Head of Household, 3. Qualifying Widow/Widower with Dependent Children, Married Filing Jointly; and 5. Married Filing Separately. Registering under your “correct” status helps you determine your tax level and eligibility for deductions and credits. So before you start filling in any information, make sure that you are filing under the correct status.
- Miscalculations and Misspelled Names
Believe it or not, the most common mistake people make is spelling mistakes. Since most tax returns are now filed online, you can personally inspect your details at the tax office and make sure everything is filed correctly. Another common mistake people tend to make is forgetting to sign their names. If you fail to submit a return with a signature, the IRS won’t process your form.
- Bank Details Errors
If you choose to make a direct deposit to receive your refund, make sure your bank code and account number are correct. These errors slow down the payment process. Paying attention to your bank details will get you a less timely refund. However, you may face late fees and penalties for late payment when your tax refund wasn’t deposited on time.
- Remembering to Include Any Additional Income
Another costly mistake is forgetting to file any extra source of income-you made throughout the year. Those who work part-time all year-round are given a 1099-MISC form for miscellaneous income. Forgetting about this “extra income” in the account could be costly and could delay your return.
- Spending Your Tax Refund the Right Way
If you have debt, a tax refund is a perfect way to help you on your way to financial recovery. If people make mistakes in their tax returns this year, wasting their tax refunds should be top of the list. Moreover, early submission of your tax return will help you receive the maximum return, so think of ways how you can smartly spend your refund.
Visit the CreditGUARD at https://www.creditguard.org/ to learn some helpful tips about a variety of tax-related topics. Whenever you need professional advice about your finances, our credit counselors are ready to help. Call today at 800-282-8497 for a nonprofit financial consultation.