Tax filing involves the completion and submission of tax returns to the national, state or even municipality imposing the taxes. Individual filing requirements vary depending on income, age and other factors. Whereas tax returns include; information on income, estimated taxes owed, exemptions for which the filer qualifies and other relevant supporting documentation. Income tax refers specific to taxes on wages or other profits earned by an individual or business.
Therefore, many state governments also require the filing of state tax returns and businesses must report their revenues, expenses and employee payments and benefits. Rushing tends to result in mistakes and those errors can slow processing of the tax return, resulting in delayed tax refunds or worse from Internal Revenue Service (IRS). Therefore, IRS has identified the nine errors that they see at tax time. The most common tax-filing errors to avoid are:
- Wrong or missing social security
- Wrong names.
- Filing status errors.
- Math mistakes.
- Errors in figuring tax credits or deductions.
- Incorrect bank account numbers.
- Forms not signed
- Electronic filing PIN errors.
- Health care reporting errors
The following five tips should guide one when filing the tax returns:
Ensure proper documentation and record-keeping:
It is frustrating to set out to file tax return and only to realize that some of the important documents are missing. Therefore, to guarantee this to not happen, put in place an effective record-keeping system, this can be a marked envelope or anything that can keep the documents in an orderly manner.
Proper understanding of the tax changes:
The tax code is constantly changed by the IRS and congress and some of these changes might impact on tax filing especially those affecting vital credits and deductions.
Need for a tax pro:
The tax code is complicated and a fact that compels evens the IRS commissioner to engage the services of a tax preparer. Most of taxpayers hire tax preps annually and there is a need to make up solution early enough whether one will file the return on his or her own or hire the services of tax pro.
Obtain all vital tax forms:
The introduction of free-file by the IRS has led to an increase in e-filers, therefore, accounting for all tax returns filed. The IRS are no longer mails tax returns to taxpayers but one can download all the necessary forms from the IRS website or make a personal request to the IRS.
Make file and review:
This is where one may have all the tax documents and forms ready but if one starts the filing process late, it may either fail to file in time or even risk errors on the returns. The best way to avoid this is to commence the filing process early and then spare sufficient time to review the return before mailing. Proper preparation and planning will ensure that the tax return is filed appropriately and is free from common tax errors that might fetch dreaded IRS tax penalties and even the interests.