Social Security numbers—wrong number, no number, and misplaced digits could really ruin everything.Here’s how to make at least one painful moment in life a little easier to take.
1. Make No Mistake. Every year the IRS sends thousands of notices to taxpayers nationwide because of easily preventable errors including these:
Social Security numbers—wrong number, no number, and misplaced digits could really ruin everything.
Despite the use of computers, math can still be a source for errors. Especially if you’re adding numbers on the side and inputting only the total on the return.
If you’re filing electronically, you’ll be signing your return electronically, too. But if you’re not filing electronically, make sure you sign that return.
If you’re paying by check, make sure you sign that, too.
Make sure you’re using the right form. Using a simple form like an EZ might be fast, but be sure you wouldn’t get a bigger refund with a 1040A or 1040.
2. Paying for a Pro? Use Them. When you decide against do-it-yourself software and enlist the service of a pro, you may not be accomplishing much other than creating a bigger bill. If you’re going to pay a pro, ask as many questions as you can about strategies to minimize your taxes and get enough sensible, specific, actionable advice to offset the additional cost.
3. Don’t Agree to a Tax Refund Anticipation Loan. Every year Americans take out loans on their tax refunds . . . and every year tax preparation companies rake in millions in interest and fees. Need your money fast? Use this simple system to get it: 1) File electronically, it’s much faster than paper. 2) Use direct deposit. Combining those two things can get you your return within eight to fifteen days. If everybody did this, refund loans would be obsolete. If you’re getting big refunds, amend your W-4 to have less withheld on your paychecks.
4. Start Early. Every year some of us wait until December 24 to do our Christmas shopping or the day before our anniversary to rush out and get a gift. Even though we knew of the occasion well in advance, we procrastinate. While that may seem acceptable, traditional, even cute when it comes to shopping, don’t adopt that attitude when it comes to taxes.
Waiting until the last minute and rushing through your taxes is more than just stressful. It’s dumb. Because if you miss potential breaks and deductions due to haste, what you might waste is thousands of dollars. Start early, take your time, do a little research, and see how much less taxing your life can be.
SOURCE: Stacy W. Johnson, CPA and financial expert.