People make mistakes all the time but there are some mistakes you cannot correct that end up costing you a great deal. This is especially true when it comes to taxes. People often make minor mistakes which are totally not at all insignificant in the eyes of the law. It is important that you pay special attention to all the steps of filing taxes and take into consideration even the minute details before submitting the final documents. It is better if you hire tax preparers and marine tax accountants in order to assist you in filing your taxes. Here are some common mistake people make that can cost people more than they owe, which you need to avoid.
Not providing Income Verification
The shortest way to tax audits is to not provide income verification when filing your taxes. If you don’t have a concrete proof of the source of your income with other documents, you can certainly expect a tax audit which is never good news. Makes sure you attach a copy of W-2 or 1099 documents that are provided by your employer, with your tax information if you want your tax filing to go smoothly.
Not Researching before Filing Claims
A great number of people think they are entitled to certain tax credits and deductions and go to great lengths for claiming them. However, in most cases they find out that they are, in fact, not eligible for these tax deductions. This not only wastes time of the legal authorities, who are already stressed out during the tax season but also cause unnecessary inconvenience to yourself as well.
Filing Tax in Paper Format
Although, filing taxes in paper format is complete acceptable, not many people prefer it these days. Moreover, there are high chances of writing mistakes and math errors when using the paper format, in which case you will have to start the whole process all over again. Nowadays, there is certain e-filing software that is specifically designed for taxes and conducts the whole process quite accurately. Make sure to use them for filing your taxes this season.
Incorrect Social Security Number
A single digit can make a huge difference. The notion couldn’t be truer for social security numbers. The tax documents require accurate financial details and social security numbers of taxpayers however, if you mess up even one digit, your documents will be rejected. And this is not even the worst scenario, in worst cases; you will end up paying more taxes than you owe to the IRS. Always review and check the financial details especially the social security numbers before filing taxes.
Not making the Deadline
If you miss the deadline, you will face penalties. The law is as simple as that but the penalties can cost you way more than you think. Do not leave your taxes for the last minute and file them early on in the season. This way, not only you can avoid penalties but you can also get tax returns earlier than anyone else. In some cases, the authorities can provide extension if you have a valid reason.