With the approach of the holiday season comes the looming deadlines for end-of-year taxes. Whether you're filing on your own or working with a tax service, one of the most important things to focus on is accuracy. While you might think that it only stands to reason that the information should be accurate, the IRS reports that your chances of making a mistake increase by twenty times when you file a hard-copy return instead of doing it online. Here's a look at a few common mistakes that you should watch for before you send in that return.
Misspelled or Incomplete Information
Sometimes, in the rush of trying to get your tax return finished, you might accidentally overlook a field in the header where you input your personal information. If you forget something like your Social Security number or you misspell your name when compared to your Social Security card, you may face a delayed return.
What many people don't realize is that this type of mistake can be as simple as leaving out a middle initial that is on your Social Security card. If the name on your return doesn't precisely match the name on your Social Security records, there may be questions. Additionally, if you got married this year, make sure that you have changed your name with the Social Security Administration before trying to file your tax return using your spouse's last name.
Miscalculations or Math Errors
With so many specific regulations and restrictions about calculating taxable income, deductions and estimated tax amounts, the numbers can get confusing. When you consider the fact that math doesn't come easily to everyone and mistakes can happen, you'll want to double and triple-check the calculations before you send your forms in.
Sometimes, it only takes a small miscalculation to be the difference between a return and a significant tax bill. If you were within a dollar or two of the income limit for certain credits or deductions, that error could put you over, eliminating your eligibility for that deduction or credit. This can leave you with a tax bill that you weren't prepared for.
The best way to avoid calculation errors is to fill out your tax forms electronically. That way, the calculations are done for you and you don't have to worry about missing a number somewhere. You can also work with a tax filing specialist who can handle the tax paperwork for you.
Incorrect Business Deductions
Working from home gives you the ability to deduct some of your home office space on your taxes, provided that you meet the criteria set forth by the IRS. Since rules and regulations can change quickly, these types of deductions should be reviewed by a licensed tax preparer.
The home office deduction can be complex. You can typically deduct a portion of your mortgage, insurance and utility costs based on the square footage of your office space. Before you can qualify for this, though, that office space must be used only for business and no personal activities. A licensed tax preparer, such as Balkcom, Pearsall & Parrish CPA, can help you determine the percentage that you're eligible to deduct after assessing how you use the space to be sure that you qualify.