We all make mistakes. It’s a part of life. Sometimes mistakes are something you can laugh off and learn from. In other cases, mistakes can be costly. Errors on your tax return generally land in the last category.
Below are three of the most common mistakes made when filing tax returns.
Getting your Social Security numbers wrong
It’s that 9 digit number you’ve had to use everywhere. Your probably know it as well as the telephone number you had growing up. Nonetheless, the IRS lists wrong and missing Social Security numbers at the top of “most common mistakes” made by tax return filers.
Remember, every member of your household listed on your return needs to have a social security number. Make sure to double check all the numbers before submitting your return to ensure there aren’t any transposed or missing digits.
Spelling your name wrong
Laugh all you want, but this is on the IRS list of common tax mistakes.
There are plenty of scenarios in which people can, and do, misspell their names on their income tax forms. That simple error can lead to rejected returns and delayed refunds.
Remember! You need the name on your forms to match the name listed in Social Security records. So that means you can’t use your nickname, nor can you just use your middle name (if that’s what you go by in your day-to-day life.) Further, if you recently married or divorced and haven’t registered a name change with the Social Security Administration, you must use your old name to file your return.
Failing to claim all your income
A very common mistake is believing you don’t need to claim income unless you receive a W-2 or 1099 form for your work. In reality, you need to claim ALL income for the year, regardless of whether someone paid you $20 or $2,000 for a side job.
While most people are aware they must include wages, salaries, interest, dividends, tips and commissions as income on their tax returns, many don’t realize that they must also report most other income, such as:
- cash earned from side jobs
- barter exchanges of goods or services
- awards, prizes, contest winnings
- gambling proceeds.
Cheating the IRS may seem like a victimless crime, but you could be seriously hurting yourself if you are ever audited.