Common Mistakes to Avoid When Filing Your Taxes Early

Most people tend to file taxes early because it assures that they don’t have to do last minute calculations and make hasty errors. Making the slightest mistakes in your calculation can send IRS auditing your files deeper, and you don’t want that to happen. A professional’s help while calculating your taxes is thus highly recommended. Even though filing early can be beneficial in a lot of ways, according to tax experts, following are the most common mistakes that even the early birds can make.

Filing the Wrong Tax Forms or Forgetting Them Altogether

Keeping in mind that the forms are tricky and sometimes not all that straightforward can help you rush less. Especially those multiple income sources can have a tough time filing a form so if you haven’t submitted a form and the IRS receives its matching copy; it may result not only in delayed form processing but also in penalties. In worst case scenarios, an audit may follow. Many deductions and credits require submitting a separate form so take care of all the outgoing as well as incoming ones.

Not Rechecking the Information Provided

A lot of calculations need to be reassessed. Also proofreading result in preventing a lot of careless mistakes such as not remembering to sign the form and many other foolish reviewing the form one last before submitting is always ideal.

Incorrectly Filing an Amended Form

At times it is not ideal to file an amended form immediately after you realize your mistake. Let’s suppose if there is a math error, the IRS will likely correct and notify you of any missing forms and in such a case, filing an amended return should be done to request amendments in filing status. Also, form 1040X should be used for amendments instead of a new 1040 while making sure that they are paper copies.

Neglecting the 1095 Requirements of Health Form

Health insurance bought in exchange for the tax year of 2017 does not imply until 2019 no matter what has been mentioned in the Tax Cuts and Job Acts. The 1095 health form will still be in effect at least until 2020 so don’t let it confuse you.

Lack of Contribution to IRA

Taxpayers often skip contributing to the previous year’s retirement account until Tax Day. Also, make sure that the contributions made more than the assigned limit can incur taxes so remember to inform the financial institution the exact position where your account is located and whether the extra amount you have paid belongs to the last year’s account so they may not be accounted for the present year’s contribution.

Forgetting Required Minimum Withdrawals

The older taxpayers often commit this mistake. Some retirement plans require a minimum withdrawal after the account holder reaches the age limit of 70 and a half. But in cases, you forget to withdraw those distributions until a specified amount of time and date, an impending penalty awaits them which might include the not-withdrawn amount taxed at 50%.

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