Beware Costly Tax Season Mistakes

Some of the most common errors that filers make include missing a tax break, providing incorrect bank information or accruing penalties for failing to file on time.

If you’re expecting a refund but your basic personal information doesn’t match, it could take a minimum of four to six weeks for the IRS to notify you via mail that you need to respond and correct your mistake.

Here are common errors that taxpayers should avoid:

Not filing on time.

It’s tempting to put off filing your taxes until just before the April 15 deadline (May 15 this year thanks to an IRS extension), but making a silly mistake may wind up costing you. While filing for an extension will give you more time, you still need to pay any taxes owed by the original deadline.

Falling for tax scams.

Be wary of unscrupulous individuals who may offer to prepare your taxes but could steal important personal information from you. As part of a hot scheme in 2021, identity thieves are targeting tax professionals by sending an email that appears to be from the IRS. The phony email refers to “IRS Tax E-Filing” and verifying key e-file information.

Entering incorrect bank account numbers.

Be sure to double-check the routing and account numbers on your return. Taxpayers anticipating a refund should choose direct deposit, typically the fastest way to get your money.

Submitting unsigned forms.

An unsigned tax return isn’t valid. In most cases, both spouses must sign a joint return. Exceptions may apply to members of the armed forces or other taxpayers who have a valid power of attorney. You can avoid this error by filing your return electronically and digitally signing it before sending it to the IRS.

Failing to report all of your income.

Individuals often don’t realize they generated income that is subject to tax, including unemployment compensation, rental income, or earnings generated from stock options, dividends and interest. Omitting income from a tax return can result in unpaid taxes subject to interest and penalties.

March 31, 2021.Florida Realtors. Beware Costly Tax Season Mistakes.

Retrieved from: https://www.floridarealtors.org/news-media/news-articles/2021/03/beware-costly-tax-season-mistakes

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