Last-Minute Tax Filing: Avoid These Costly Mistakes

As the tax deadline looms, millions of Americans are scrambling to file their returns. The pressure to meet the April 15 deadline can lead to rushed decisions and costly mistakes. But with the right strategies and tools, you can avoid these pitfalls and ensure your tax return is accurate and complete. Let's dive into the most common tax filing mistakes and how to steer clear of them.

Math Errors: The Silent Killer

Math errors are one of the most common and costly mistakes taxpayers make. Simple arithmetic mistakes can lead to delays in processing your return and even trigger an IRS audit. The IRS found nearly 2.5 million math errors on returns filed for the 2017 tax year. To avoid these errors, use tax preparation software like TurboTax or H&R Block, which automatically handle calculations and catch errors before sending forms to the IRS. As Alison Flores, manager with The Tax Institute at H&R Block, advises, "Simple mathematical errors are one of the top reasons for IRS audits. Double-check all amounts you enter and use tax software like H&R Block that handles the calculations to minimize the risk of errors."

Incorrect Filing Status: The Hidden Trap

Choosing the wrong filing status can result in higher taxes and missed tax credits. For instance, certain filing statuses like Head of Household offer better tax brackets and a higher standard deduction than single status. Choosing the wrong filing status could cost you more in taxes. To avoid this mistake, carefully review and choose the appropriate filing status. The Interactive Tax Assistant on IRS.gov can help determine the correct status.

Entering Information Inaccurately: The Devil in the Details

Mistakes in entering personal information, such as income or Social Security numbers, can cause significant delays and confusion. For example, one major impact is delayed processing and refunds. If critical information, such as income, filing status, or Social Security numbers, is entered incorrectly, the IRS may take additional time to review the return and resolve discrepancies, which could hold up any refund you’re expecting. To avoid this, carefully double-check all the information you input, especially income details, filing status, and Social Security numbers.

Filing Too Early: The Premature Filer

Filing taxes before receiving all necessary documents can lead to missed deductions or leaving money on the table. For example, institutions and organizations issuing tax forms may sometimes send them late or send amended versions of forms a few weeks after sending the initial document. Before you file, think carefully about all the activities you did that might result in someone issuing you a tax document. Did you open a new investment account, make a charitable donation, pay for school tuition, or pay a student loan? Make sure you have all the documents you need before filing.

Unsigned Tax Forms: The Forgotten Signature

Forgetting to sign tax forms can cause delays. For example, make sure your return is signed and dated, especially for joint returns that require both spouses’ signatures. To avoid this, file your taxes electronically and digitally sign them.

Maximizing Deductions: The Hidden Treasure

Many taxpayers miss out on valuable tax-saving opportunities because they aren't aware of their eligibility for certain tax deductions and credits. While the IRS will likely catch your missing W-2 income or if you've claimed someone as a dependent who's already been claimed by someone else, they won't fix your return if you forgot to claim the Child and Dependent Care Credit or the home office deduction. That means you could be leaving some serious money on the table. The good news is TurboTax will ask you simple questions and guide you through filling out the right tax forms and help you search for the deductions you qualify for to help you get the highest possible refund or lowest amount of tax due.



The Role of Tax Preparation Software and Professional Tax Preparers

The use of tax preparation software or professional tax preparers significantly impacts the accuracy and efficiency of last-minute tax filings. Tax preparation software and professional tax preparers help minimize errors that can delay refunds or result in additional taxes owed. For example, tax software like TurboTax and H&R Block automatically handle calculations, flag common errors, and prompt taxpayers for missing information. This reduces the risk of math errors, which are one of the top reasons for IRS audits. Additionally, professional tax preparers can provide valuable tax tips and answer any last-minute tax filing questions, ensuring that all deductions and credits are accurately claimed.

In summary, the use of tax preparation software or professional tax preparers enhances the accuracy and efficiency of last-minute tax filings by minimizing errors, ensuring timely submissions, and maximizing deductions and credits. By being aware of these common mistakes and taking the necessary precautions, taxpayers can avoid costly errors and ensure their tax returns are accurate and complete.