A GUIDE TO YOUR PERSONAL INCOME TAX: COMMON FILING MISTAKES
Failure to file the return on time is the most common mistake committed by taxpayers. Here are some of the other mistakes, which can cost you a lot of money and a ton of regret.
Forgetting to Include Documentation
The Internal Revenue Service does not require taxpayers to attach receipts, they need to submit some forms such as 1098s, 1099s, and W-2s, among others. The entity that issued this form also sent a copy to the federal agency; hence, not submitting these papers can lead to unwanted attention to your tax return. When it comes to taxes, when in doubt, include the forms.
Forgetting Social Security Numbers
Taxpayers indicate their own Social Security numbers, but often forget to include those of their children or dependents. The IRS prohibits anyone from claiming deductions or dependency exemptions without providing a valid taxpayer identification number. Check all your supporting forms and schedules on top of Form 1040 to back your dependents’ information.
Forgetting to Sign
An unsigned tax return is considered a tax return not submitted. The IRS won’t even process it unless it is signed and dated precisely. Most people do not discover this error right away, and it normally takes the agency a month or two (at the very least) to notify a person of their unsigned tax return. If your return is unsigned, file a properly signed return as interest and penalties start accruing following the April 15 deadline.
Forgetting to Stamp
Forget (almost) everything but stamping on envelopes. Also, put an adequate amount of postage on the envelope. There may be a penalty, but the IRS does not send people who submitted their tax returns late. The penalty is usually a small amount for those who submit their returns a few days after the deadline.
Using Wrong References
Whenever tax deadline draws near, taxpayers rely a lot on the Internet for computations, limits, and the like. However, those who are rushing to complete their returns on or before the deadline can state their taxes inaccurately. Such errors can lead to sizable slipups and penalties. Double-check the forms and details you are using. Remember that the IRS website is every taxpayer’s first and primary source of information.
Tune in to the next tutorial for avoiding nasty tax shockers.
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Connection of Inflation and Interest Rates
Ethical Investing: Its Advantages and Disadvantages
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