Watch stocks you care about
The single, easiest way to keep track of all the stocks that matter...
Your own personalized stock watchlist!
It's a 100% FREE Motley Fool service...
When filing taxes, it's important to get things done right the first time. Some of the most common tax-time mistakes come down to simple problems that everyone can avoid. Submitting a correct tax return reduces the chances that your return will be rejected or audited. Certain mistakes can lead to a rejection of your tax return, which could result in fines and penalties.
Check out these tax mistakes that you should be careful to avoid.
- Wrong number: A surprising number of people put the wrong Social Security number on their tax forms or even forget to include their Social Security number entirely. Each year, the IRS gets thousands of returns without a Social Security number. If your tax forms are missing a Social Security number or have the wrong number, the IRS rejects all the deductions and exemptions you filed for. Plus, if you owe the IRS money, they charge late fees and interest on what you owe.
- Sign here: Did you know that if you do not sign your return, the IRS considers it to be incomplete, no matter how much work you put into it? It's true. Failing to sign your tax forms is one of the biggest mistakes people make. It feels good to finish your taxes, but make sure they are all the way done by signing and dating them before you submit. Again, if you owe taxes but the IRS doesn't accept your return, your payment will be considered late and you may be charged extra fees.
- Bad math: Everyone knows how to add and subtract, but under the stress of filing taxes, lots of people mix up their numbers and submit tax returns full of incorrect figures. This is more common among people who file their taxes using traditional paper forms than for those who e-file, but even for e-filers, a simple missed keystroke can cause chaos. When you finish your forms, double-check your work and have someone proofread your return. If you're doing your taxes by hand, go over your work with a calculator .
- Missed deadline: Taxes are always due on April 15, but some people miss the deadline. If you know you can't finish your taxes by April 15, file for an extension. Many people give up and don't file if they think they won't finish, but so long as you submit the correct form for an extension by April 15, the IRS will give you a few more months to wrap things up.
- Unreported income: If you work as an independent contractor or had more than one job or source of income, it can be hard to round up all the right documents come tax season. Not reporting all sources of income is a big mistake in the eyes of the IRS, no matter how many jobs you had. Before you file, make sure there aren't any stray 1099s or W2s stuck in your junk mail pile and account for all of your income. If you realize you are missing some forms, contact the employer to request what you need.
Bottom line? Take your time and be careful when filing out your tax forms, because small mistakes can have a big financial impact where the IRS is concerned. Make sure you double-check anything tax-related before filing, and be honest about your income.
Don't let your taxes get out of control
Tax increases that took effect at the beginning of 2013 affected nearly every American taxpayer. But with the right planning, you can take steps to take control of your taxes and potentially even lower your tax bill. In our brand-new special report "How You Can Fight Back Against Higher Taxes," the Motley Fool's tax experts run through what to watch out for in doing your tax planning this year. With its concrete advice on how to cut taxes for decades to come, you won't want to miss out. Click here to get your copy today -- it's absolutely free.