Updated: 10/27/2010 9:00 AM ET|
10 tax goofs many of us keep making
Year after year, the IRS sees Americans committing the same sorts of mistakes on their returns. Many of these errors are easy to avoid; some are more complicated.
Your income-tax return can inflict a special kind of pain when you make a mistake. Even a simple error can cost you time, aggravation, stress and, yes, money. So doing your return dispassionately and carefully is a must.
The Internal Revenue Service says taxpayers make some mistakes again and again. (I see them a lot, too.) If you can keep from making them, you'll avoid much of that lost time, aggravation, stress and lost cash.
Here, according to the IRS, are the 10 most common taxpayer mistakes:
1. Claiming the wrong filing status
Sorry, you can't just choose to file single or married. Your marital status is determined as of Dec. 31. Anything before that date really doesn't matter for tax purposes. You file either jointly or married filing separately. You may qualify for "head of household," but you have to satisfy all the requirements.
You don't qualify just because you consider yourself the head of your household. In fact, you can't be head of household if you're married unless you qualify as an abandoned spouse.
Claiming the wrong status could kill your eligibility for the child tax credit, the earned-income credit and exemptions for dependents.
Check out the instructions for Form 1040 for detailed information to help you select your correct filing status.
2. Omitting or using wrong Social Security numbers
The Social Security numbers you list for your dependents, the earned-income credit and the child tax credit must match your dependents' Social Security cards. Otherwise, the IRS computers will reject your credits and deductions.
If you're still doing your return by hand, put down that stone tablet you're reading and pay attention. Make sure your handwriting is legible, at least on your tax return. Although to be fair, I suspect that many of these mistakes attributed to taxpayer error actually result from bad inputting by the IRS.
3. Failing to use correct forms and schedules
Think of the IRS as a vast bureaucracy that responds to the dictates of an outdated computer system for audit direction. You don't want to anger the computer gods.
If you file your employee business expenses on Schedule A without attaching Form 2106, the computer's going to click. The more the computer clicks, the more likely that you will get audited.
So, be nice to the computer. Correctly file all of the appropriate forms.
4. Failing to sign and date the return
This one is easy. If you don't sign the return, you haven't filed. Both spouses must sign a joint return. If you haven't filed, you're going to be subject to all kinds of penalties, not to mention interest on any amounts not paid in full.
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