Read My Lips. No New Tax Screwups.
NOTE: Congratulations to Kay Bell of Don't Mess with Taxes and Carnival of Taxes fame. I was unaware that she wrote for "Yahoo Finance."
Kay Bell provides ten common mistakes which could slow down return processing (and potentially a refund) or cause unexpected taxes and penalties later. The mistakes listed are:
[1] Math errors--including transpositions, omissions and arithmetic errors. Software helps but does NOT eliminate math errors.
[2] Wrong ID (SSN)numbers--you, dependents and 1099s. DON'T try to sneak in your dog.
[3] Ignoring IRS material--use those labels and envelopes where possible.
[4] Choosing an inappropriate form--easiest is not necessarily best.
[5] Omitting IRS supporting forms--you need to include the W-2; also, there is an order for those supporting forms (2106, 4797, etc.) and schedules (A, C, D, etc.) shown at the top right of the supporting form or schedule.
[6] Omitting unearned income--EASY for the IRS to catch and you may have to pay penalties as well as the extra tax.
[7] Using the wrong tax calculation--yes, the tax table is available to $100,000, but the capital gains tax calculation on Schedule D may save you money.
[8] Cash flow--don't staple a check for payment, get the details right on the face of the check or the direct deposit info for refund.
[9] Sign your return--can delay refund or even create a failure to file penalty.
[10] Overlooking the due date--it really does happen--you don't want the penalties and hassle.
Kay's list of simple but common errors is definitely worth attention.
Kay Bell provides ten common mistakes which could slow down return processing (and potentially a refund) or cause unexpected taxes and penalties later. The mistakes listed are:
[1] Math errors--including transpositions, omissions and arithmetic errors. Software helps but does NOT eliminate math errors.
[2] Wrong ID (SSN)numbers--you, dependents and 1099s. DON'T try to sneak in your dog.
[3] Ignoring IRS material--use those labels and envelopes where possible.
[4] Choosing an inappropriate form--easiest is not necessarily best.
[5] Omitting IRS supporting forms--you need to include the W-2; also, there is an order for those supporting forms (2106, 4797, etc.) and schedules (A, C, D, etc.) shown at the top right of the supporting form or schedule.
[6] Omitting unearned income--EASY for the IRS to catch and you may have to pay penalties as well as the extra tax.
[7] Using the wrong tax calculation--yes, the tax table is available to $100,000, but the capital gains tax calculation on Schedule D may save you money.
[8] Cash flow--don't staple a check for payment, get the details right on the face of the check or the direct deposit info for refund.
[9] Sign your return--can delay refund or even create a failure to file penalty.
[10] Overlooking the due date--it really does happen--you don't want the penalties and hassle.
Kay's list of simple but common errors is definitely worth attention.
posted by Dan Meyer at 9:47 PM
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