Almost all the Americans complain that paying taxes is a complicated process. Last reports say that many taxpayers overpay because of making mistakes. So why should you pay more to Uncle Sam? Read and remember these tips to avoid expensive errors and to protect your financial wellbeing.
Failing and Waiting to File
Anything can happen so if you can’t file taxes by the deadline, April 15, then file for extension with the help of 4868 Form. Also you can make a call or send an email with an extension request. Extension gives you more time to file taxes but not to pay them. In case you fail to pay what you owe with your request then get ready for paying penalties and interest.
As earlier you file taxes as better it is because taxpayers receive refund early. Waiting to file is one of the most popular mistakes taxpayers make. Most people get refunds yearly, the average one is around $3000. Normally employers send out special forms as only the New Year starts. So start filing all the necessary documents as only you get them. Don’t wait for too long!
Using Wring Household Status
Change of living situation importantly impacts tax filing status. As a consequence you can overpay or underpay taxes. Every change in your life, for example divorce or new kids, is important. And in case your situation is unusual and complicated and you are not certain about some things then it’s always better to check with a tax professional than to make a mistake.
Filing Taxes on Paper + Math Mistakes
It’s not good to forget that we live in 21st century and most things can be done electronically or online. Even when you want to get money online from direct lenders you can file an application form on the Internet. Today it’s necessary to file taxes electronically. Filing on a paper makes the refund process slower and doesn’t allow you to easily check mistakes. IRS says that math mistakes are the most popular and they can delay your refund. If you underpay because of these mistakes then you’ll be required to pay additional amount and also the interest.
Forgetting to File All the Necessary Forms
It’s important to file all the required forms. You should file a new form on amounts of foreign assets and also sales or exchanges of assets. Also report how much money was received through the payment systems. If IRS will not find the required information then you’ll receive a request to provide more details. It’s also important not to fail to report all of your income.
Providing the Wrong Number of a Bank Account
It’s clear that the direct deposit allows you to get your refund much faster. But it’s necessary to make sure that you provided the right bank account. Otherwise the money will go to someone else and it will take time to find them and IRS takes no responsibility for this that’s why it’s better to check all the information twice. Better spend a little more time checking all the details because you will spend more time trying to fix these mistakes in case something goes wrong. Remember that every small detail is important in this process.