5 Tax Mistakes You'll Want to Avoid

Check out these tax mistakes you'll want to avoid before April 15!

Mar 22, 2014 at 12:00PM

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.

  1. 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.
  2. 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.
  3. 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 .
  4. 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.
  5. 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
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4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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