3 common tax refund mistakes to avoid
Taxpayers can claim refunds if they have paid more tax during the year than they actually owe the government. One can take several steps to claim returns every year, however, the returns filed should not contain errors. Such mistakes can delay the process and result in taxpayers getting a smaller refund than the one they sought. So, here are a few common tax refund mistakes one should avoid to make the return process smoother:
Overlooking tax deductions
Deductions make up a large part of tax returns. One can use IRS’s calculator to compute the amount of state and local sales tax they can deduct. For instance, any out-of-pocket contributions or donations, such as donating food to a school, can add to an individual’s tax deductibles annually. Similarly, reinvesting dividends received from mutual funds can also increase one’s tax deductibles for the year. Paying high-interest debts also boosts the refund one can claim. Overlooking these deductions when filing tax returns is one of the most common tax refund mistakes.
Making calculation mistakes
This is also one of the most common tax refund mistakes people make. Mathematical or calculation errors sneak into the returns when entering numbers on the filing forms. While verifying tax payability, the IRS double-checks that all the amounts specified on the first two pages of the form tally with the actual numbers. So, if there are mistakes, the tax refund amount can change drastically or delay the process of receiving the refund. Instead of filling out tax forms manually, one can use specialized software to get accurate figures. Automating the process can eliminate simple mathematical errors.
Not signing tax forms
Forgetting to sign the tax forms after filling them is a common mistake when filing tax returns. Every year, the IRS receives many tax forms without the signature of the taxpayer and cannot process the returns until the documents are signed. Unsigned forms cannot be verified, and the tax return submission will be deemed invalid or unfit for consideration. So, signing the form, either manually or through a digital signature, is crucial, as this confirms the authenticity of the documents submitted to the IRS.