Taxes 2011 – Avoiding 13 Common Mistakes

Photo (cc) by Muffet

Messing up is part of being human – we all make mistakes. That being said, there are areas where it pays, both literally and figuratively, to keep them to a minimum. Prime example? Taxes.

Every year the IRS sends thousands of notices to taxpayers nationwide because of easily preventable errors. In these days of computer-generated returns and electronic filing, the type of mistakes may have changed: Math errors, for example, are certainly less frequent now. But there are still common mistakes that a computer can’t see, so you need to be vigilant. And you have powerful motivation to do so, because an error on your return can at best delay your refund and at worst result in an audit that leads to interest, penalties, and major stress.

Take a look at this short news story, then meet me on the other side for more.

Here’s another look at that list, along with some additions…

  • Wrong Social Security numbers: Wrong number, no number, and misplaced digits could really ruin everything.
  • Not checking your math: 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.
  • Not reporting all your income: If one of your 1099s got lost in the mail, you may forget to report some interest income. Look at last year’s return, and think carefully: are you sure there’s nothing else? Not reporting income is the shortest path to audit-land.
  • Overlooking deductions: Good software or a decent accountant should keep you from forgetting valuable deductions, but it doesn’t hurt to read a little to make sure. Check out 13 Tax Changes for 2010 That Could Make You Money.
  • Not signing your 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.
  • Not signing your check: If you’re paying by check, make sure you sign that, too. It should be made out to “United States Treasury” and include your name, address, social security number, daytime telephone number, tax form, and tax year on it.
  • Not attaching you W-2 or other forms: If you’re mailing your return, you need to send copy B of your W-2, 1099-Rs, and certain other forms.
  • Using the wrong form: Using a simple form like an EZ, when a 1040A or 1040 would get you a bigger refund could cost you money. Again, some software will ask you questions to avoid this one.
  • Paying to have your taxes done by a pro, or even unnecessarily paying for software. Millions of Americans are eligible for free help. Here’s a story I did on how you can find out if you’re one of them: 3 Tips for Free Tax Help.
  • Failing to file electronically and/or use direct deposit is a mistake, at least if getting your refund back quickly is important to you. Combining electronic filing with direct deposit will convert what could take weeks into days.
  • Paying for a tax pro vs. doing it yourself with simple software: If you need a pro, by all means, use one. But if you don’t, don’t waste your money. Check out this recent story: 9 Tips to Find a Tax Pro: But Do You Really Need One?
  • Going too fast because you’re on deadline: The quickest path a bad job is trying to do a rush job. You’ll potentially miss deductions and make other mistakes that could result in a smaller refund or bigger problems. Start early and take your time.
  • Taxing your budget with extra unnecessary fees: Refund anticipation loans and refund anticipation checks are almost never necessary. See Beware These 3 Stupid Tax Tricks.

Bottom line? Taxes are one of those things in life where the devil is in the details. Sometimes something seemingly simple can literally be worth thousands of dollars. So bumble, fumble, and blow it in other areas of your life, but try to get this one right the first time.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Most Popular
New Retirement Bill Would Help Savers of All Ages
New Retirement Bill Would Help Savers of All Ages

With bipartisan support, this bill could help millions of workers and retirees boost or conserve their retirement savings.

If You Find This Thrift Shopping, Buy It
If You Find This Thrift Shopping, Buy It

This iconic dinnerware is prized for everyday use as well as reselling for profit.

3 Colors That Can Ruin Your Car’s Resale Value
3 Colors That Can Ruin Your Car’s Resale Value

Select the wrong color for your next car, and it could depreciate twice as fast as others.

20 Things That Are Actually Worth Stockpiling
20 Things That Are Actually Worth Stockpiling

You don’t need a year’s supply of toilet paper to survive an outbreak, but consider stocking up on these items.

9 of the Best Things to Do When You Retire
9 of the Best Things to Do When You Retire

You’ve waited all your life for this moment. Make the most of your retirement.

Beware This Hidden Ingredient in Rotisserie Chicken
Beware This Hidden Ingredient in Rotisserie Chicken

Something foul may lurk in those delicious, ready-to-eat birds.

View More Articles

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Add a Comment

Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.