Tax time is stressful for many people, but if you don’t want to leave money on the table, you need to check your return for accuracy. By avoiding common mistakes on your tax return, you can get a refund for all the money you are due.
1. Check your math
If you are not using an online tax preparation program, you want to double check your calculations. Even a small arithmetic error can cost you money. If you file your taxes through an online tax service like TurboTax, H&R Block or TaxAct, they will do the math for you, so you can be positive that it is correct.
2. Check your personal information
When looking over your tax return make certain your name is spelled correctly, and all the names of your dependents. It’s also important to have the correct social security numbers for everyone listed on the return. Your home address and zip code must also be accurate.
3. Report all income
If you have a part-time job, do freelance work, or own a small side business, you need to report any income earned. For contracting work, you will get a 1099 form from all the companies you worked for. If you have a business, you need to include a Schedule C that details all income and expenses of your business.
4. Choose the right filing status
You have five choices for filing status. You need to choose the one that meets your personal circumstances. It’s a good idea to learn what each filing status entails before making a choice. The IRS site has a great breakdown of each filing status.
5. List all charitable donations
If you made donations to tax-exempt charities, you can use these donations, whether cash or goods, to get tax deductions. These deductions can lower your tax bill and get you a bigger refund. However, you must follow the tax rules, especially when donating household goods or clothing. Their value is not what you paid for them, but what a buyer would pay for them in their current condition.
6. Find all receipts
When it’s time to file your return, you want as many tax deductions as possible. This is only possible if you have the receipts to show that you are eligible for those deductions. Make sure to keep all of your receipts in one file or box so they are easier to find during tax time.
7. Don’t overlook medical deductions
The premiums you pay for health insurance are tax deductible. Also, the cost of transportation to and from doctor’s offices or hospitals, and the amount you pay towards Medicare are other deductions that many people forget about.
8. File your tax return on time
If you are late submitting your tax return, this could lead to penalties for late filing or for non-filing. This, of course, reduces the amount of any refund you are do.
9. Don’t overpay to have your taxes done
It’s the age of the Internet, so everything can be done online now. Sites like TurboTax and H&R Block have a wide range of online products to choose from depending on how complicated your taxes are, but even the most expensive product is far and above cheaper than hiring a CPA. If you have an easy tax file, try TaxAct, which has the cheapest plans for filing.
Errors on a tax return can cost you money. By following these simple tips, you have a tax return that brings in the biggest refund.