One tiny slip in your annual tax returns could cost you money, and even if it doesn’t, you would still have to deal with a lot of inconveniences such as a delay in the receipt of a refund you’re expecting. To save yourself from unnecessary headaches, chartered accountants in Toronto have laid out a list of common mistakes you should try to avoid:
- Miscalculations and Computation Mistakes
The single most common error on tax returns is math miscalculation. A lot of people make mistakes in transferring figures or in arithmetic and as a result, they will be given a correction notice.
In line with this, taxpayers could also make mistakes in figuring out their taxable income, estimated tax payments, withholding tax and other tax return entries. Math mistakes can also lower your tax refund or you could possibly end up owing more than you thought.
- Misspelled Names
Filing your tax returns is not just about getting the numbers right, you also need to make sure the names are correctly spelled out. The names of the taxpayer, their spouse and kids should match the tax identification number on record because any difference will slow down the processing of your tax return. This is a common problem for women who are newly married. If they change their surnames, they need to notify the Social Security Administration of this change to avoid inconveniences when filing for their first joint tax return. The same should be done after a divorce.
- Filing Status Errors
It is vital that you select the correct filing status, because doing so could make a big difference in your tax bill. So, if you are filing your first tax return after a divorce, which makes you a single parent, then you should write “head of household.”
- Direct Deposit for Tax Refunds
There’s an option for tax payers to have their refund directly deposited to several bank accounts. This option is great if you want to save some of your refund money but if you have entered multiple bank account numbers in your tax form then there’s a likelihood that you could enter them incorrectly. If this happens, your refund could end up in someone else’s pockets.
- Oversights in SSN
The IRS have stopped putting the social security numbers of the taxpayers on tax package labels and as a result, many people end up forgetting to write their identification numbers. Many transactions including retirement plan contributions, income statements and savings account interest are keyed to your ID numbers.
- No Signature
If you don’t sign your tax return and enter the date you filed it, the IRS won’t process it. This includes your e-filed returns as well. You need to sign it electronically using a PIN.
- Missed Deadline
Many people put off filing their tax return until the 11th hour. This is fine as long as you remember to postmark it by the filing date. Otherwise, you would be slapped with a late filing fee or non-filing penalty.
