Source: 401kcalculator.org via Flickr.
With just a couple weeks left in tax season, many taxpayers are putting the finishing touches on their tax returns for 2014, and getting ready to get them sent to the IRS. Before you file, though, there are some last-minute things you'll want to take a look at. Doing so will ensure that you'll avoid possible delay, or an embarrassing mistake that could force you to file an amended tax return.
To make it as easy as possible to avoid further tax pain, we've put together a simple checklist of items to go through and make sure you've done correctly before you file. If any of them apply to you, ensuring that you've followed the right procedures can help your tax season go a lot more smoothly.
1. If you changed your name, tell the Social Security Administration before you file.
If you or a dependent listed on your tax return had an official name change, it's important to notify the Social Security Administration, or SSA, before you file a tax return reflecting the new name with the IRS. The reason is that, in processing your return, the IRS does a cross-check against Social Security's records, and a mismatch can trigger a red flag that will typically result in your getting a letter from the IRS to resolve the discrepancy. In particular, if the IRS owes you a refund, failing to alert the SSA of your name change in advance can cause a delay.
Typically, you'll want to file Form SS-5 to inform the SSA about the name change. You'll get a new Social Security card that reflects the name change, although it should have the same Social Security number as you had before.
2. Do you really need to file a return at all?
Many people don't realize that, even if you have some income, you might not need to file a return. If you file as a single person and had gross income of less than $10,150, or file jointly with gross income of $20,300 or less, then you might not have to file a return. But even if your income is below those limits, those who have self-employment income of more than $400, sold their homes, owe special types of taxes on retirement plan distributions, have unreported tip income, or are subject to the Alternative Minimum Tax, might have to file anyway.
More importantly, if you're entitled to money back from the IRS due to having taxes withheld from your paycheck, or because you qualify for the Earned Income Tax Credit or other refundable credits, then you have to file in order to get those amounts. If none of those issues apply, though, you can save yourself a lot of time by not having to file in the first place.
Source: Phillip Ingham via Flickr.
3. Check your math and look for typos.
The silliest mistakes often end up causing the biggest problems. A math error can result in your paying too little in tax, or getting too large of a refund. Correcting that problem down the road could cost you extra in interest and penalties. Similarly, getting digits mixed up can trigger audit flags when the amounts indicated on your return don't match up with what's on a 1099 or W-2. Often, all it takes is a quick second look to spot problems, especially if you use tax software that automatically calculates most of the numbers for you.
4. Make sure you got all the tax breaks you deserve.
The danger of doing your own taxes is that you can miss out on deductions and credits if you don't know about them. As you do a final check of your return, go through all the credits and deductions listed on your 1040 form, as well as the schedules for itemized deductions and business income and expenses if they apply to you.
If you're not comfortable assessing whether you qualify for a deduction or credit, then tax-preparation software or a professional tax preparer can be worth the price you'll pay for their help. Many people miss out on tax breaks worth thousands of dollars simply because they don't know to claim them, so it's critical to make sure that you know about them yourself, or that you talk to someone who does.
Filing your taxes correctly and on time is important; but you don't want to fall into any of the common mistakes people make with their returns. By looking at these potential issues before you file your tax return, you can be more confident that everything will go smoothly with the IRS this year.
