Filing your tax return can be stressful, but avoiding Common Tax Return Mistakes can save you time, money, and hassle. Avoiding tax return mistakes not only ensures accurate filing but also helps speed up your IRS refund.
From double-checking your details to staying updated on tax laws, small steps can make a big difference.
Avoiding Common Tax Return Mistakes
With the April 15 tax deadline nearing, it’s time to file smartly! Avoiding common tax return mistakes can help you streamline the process, minimize delays, and secure your IRS refund faster, according to the IRS.
Here are some key tips to keep in mind before filling your tax return with IRS.
01. Gather Your Documents
Start by collecting all Your Essential Tax Documents Checklist which help you a most while filling Federal Tax Return.
- Forms W-2 and 1099: These report your income from employers and other sources.
- Supporting Documentation: Have receipts or other proof handy for deductions and credits you plan to claim, like educational expenses, Child Tax Credit or mortgage interest.
- Previous Year’s Return: This can be helpful as a reference.
Consider using electronic filing through IRS Free File or an e-file service provider. This minimizes errors and helps identify potential tax benefits you qualify for.
📢 Also Check: 1040 Individual Income Tax Return Checklist
02. Ensure Accuracy
- Filing Status: Tax software can help you avoid errors when selecting your filing status. If you’re unsure, the IRS Interactive Tax Assistant can guide you towards the most fitting option.
- Names, Birthdates, and SSNs: Double-check the accuracy of all names, birthdates, and Social Security numbers for yourself and any dependents listed on your return. Use the information exactly as it appears on Social Security cards.
- Digital Assets: A New Tax Consideration: Everyone filing Forms 1040, 1040-SR, and others must answer a new question regarding Reporting of digital assets Income. You’ll need to check “Yes” or “No” regardless of whether you engaged in digital asset transactions in 2023. Remember, all income related to digital asset transactions must be reported. For more information on when to answer “yes” and how to report digital asset income, visit the IRS.gov Digital Assets page.
✅ Read More: IRS Reporting on Cryptocurrency Gets a Twist!
03. Report All Income
Remember, most income is taxable. Failing to report all income accurately can lead to penalties and interest charges.
This includes income from interest earnings, unemployment benefits, the service industry, the gig economy, and digital assets.
If you are not ware which is income is Taxable or Nontaxable Income, check out my latest blog “IRS Tax Alerts: A Comprehensive List of Taxable Income in the United States“.
Get Your IRS Refund Faster
- Direct Deposit Accuracy: Verify your bank routing and account numbers are correct if you’re expecting a direct deposit for your IRS refund. This ensures a smooth and speedy transfer.
- Signing and Dating: Don’t forget to sign and date your return! For joint returns, both spouses need to sign. For electronic filing, authenticate your return using your prior year’s adjusted gross income (AGI).
Need More Time? File an Extension For Taxes With Form 4868
If you require additional time, you can easily request a six-month extension until October 15th using IRS Free File or by submitting Form 4868.
It’s important to note that an extension grants more time to file, but tax payments are still due on April 15th for most taxpayers.
Keep Copies for Your IRS Tax Record Retention
Once you’re ready to file, create copies of your signed return and any accompanying schedules. Maintaining copies helps with future tax return preparation and calculations if you need to file an amended return.
Typically, it’s wise to retain records supporting your income, deductions, or credits for the period of limitations specified for that tax year.
≫ Also Check: IRS Tax Record Retention: Essential IRS Guidelines for Financial Security
Paper Filers: Double-Check Your Address
While e-filing is highly recommended, those submitting paper returns should verify their mailing address is accurate on IRS.gov or by referring to Form 1040 instructions. This prevents any delays in processing your return.
By following these tips, you can avoid common tax return Mistakes, streamline the filing process, and expedite your IRS refund. Remember, the IRS website offers a wealth of resources to help you navigate tax filing. Don’t hesitate to utilize them if you have any questions.
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