It’s tax season again, and you know what that means. Time to wrangle up all your paperwork, break out your trusty calculator (or abacus, we won’t judge), and get to work. But be careful, in 2011 the IRS reported that it discovered 2.7 million errors on about 22 million tax returns, which was an improvement from the 6.6 million in 2010.
From the Washington Times:
Common problems: calculations to determine the amount of tax owed, CNN says. Roughly 15 percent of errors came in exemption columns; another 13 percent came from earned income tax credit computations.
Simple Errors
IRS.gov’s website points out that some of the most common of all mistakes are simple user errors. Like entering the wrong Social Security number or shortening it; entering correct numbers on the wrong lines; making simple math mistakes. If you are mailing your taxes this year, be sure to sign them and put in the date, and sure to include a stamp on the envelope. Simply: take your time.
Improper Claiming of Dependents
First, a dependent is someone who depends on you financially, like a child or a spouse, who you can then claim on your taxes for various credits and exemptions. Easy, right? Not always (click here to read the IRS’s “Six Important Facts about Dependents and Exemptions”).
Basically, claiming someone as dependent hinges on several factors, and become especially murky in blended family situations, or in situations where the person involved isn’t a family member. It can sometimes be as simple as “do you provide at least half of this person’s support?” If yes, then you can claim them. But for complex situations, it’s best to consult the IRS’s website.
Not Required to File?
Everyone should file. Here’s what the IRS says (and they’re right for many reasons!):
Even if you do not have to file a return, you should file one to get a refund of any Federal Income Tax withheld.
If you don’t file, you could be missing out on earned income credit. Earned income credit (EIC) is a refundable credit that entitles the taxpayer to money in excess of the taxes that were paid. The average amount being about $2,000. Didn’t have an income and want to know if you qualify? Click here to check your eligibility.
Bottom line, don’t rush, cross your t’s, and dot your lower case j’s, and don’t be afraid to ask for help. Taxes can be painless, as long as you’re willing to put in the time.
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