1. Misreporting income
If you misreport your income while filing taxes, you will receive a notice from the IRS. They will send you a bill detailing the difference amount. You can pay it off if you feel the calculation made by the IRS is correct. But in case you misreported your income, and the IRS report is also not accurate, you'll have to send the Form 1040X Amended Return.
And in case the difference between the income as reported to the IRS, and the income that you mentioned in your return is large, it can even lead to a tax audit, but it generally doesn't happen for minor mistakes. Nonetheless, you should be cautious while filing returns to avoid getting a notice.
2. Mathematical errors
You could be super confident in your numeric abilities, but you might still make math errors while filing taxes. To avoid any such mishap, have ample time in hand while doing the calculations, double-check that you haven't missed any number, and then only proceed with the filing.
If you find it too tedious, you can always take help from a professional. They will take care of all the complicated calculations to make your file error-free.
3. Not deducting proper expenses
If you opt for the standard deduction without looking for other deductions, you might be making a mistake. If there are eligible write-offs, make sure you furnish them on your return. For example, don't shy away from filing a deduction for your home office, if you're self-employed.
You can also write off property tax, mortgage interest, state taxes, and contributions to charity, abiding by the limits.
4. Wrong filing status
Your tax filing status determines your income tax rates. There are different statuses such as single, head of the household, married filing jointly, and so on.
Every status has its own perks and a different set of standard deductions, so always make sure you're filing under the correct status, as applicable to you.
5. Late filing
Do you wait until the last few days of the deadline to file your taxes? This approach might not be full proof, especially if you find any errors in your file just before your final submission. And it's common to make a typo or make some small errors here and there when you're in a hurry.
Missing the deadline means you'll have to pay interest to the IRS. File your return much before the deadline to avoid this.
If you want to take the hassle out of your tax filing process, Accountants Now is here to help you out. Contact us today, and let our tax professionals take care of everything related to taxes, on your behalf!