10 tax-filing mistakes to avoid, 10 tax breaks to take and getting more time to take care of these, and other, tax tasks
Since, as the old saying goes, haste makes waste, I thought you might want to take a breath and then take a look at
- Filing mistakes to avoid,
- Tax breaks you shouldn't overlook, and
- How to get more time to take proper care of your taxes.
Don't make these tax filing mistakes
Every year the Internal Revenue Service sees the same old tax errors on thousands of returns. Make the IRS' job, and your life, easier by avoiding these common mistakes on your 2012 Form 1040:
- Math miscalculations -- This includes addition, subtraction, percentage calculation and figure transpositions when you enter the number.
- Direct deposit errors -- Wrong financial account or routing numbers, as well as (again) the transposition of numbers (can you tell I'm a bit numerically dyslexic?).
- Overlooking additional income -- Forgetting about those side-job payments or missing the 1099-MISC earnings that were copied to the IRS.
- Filing status confusion -- Yes, you're single again now that the divorce is final, but you have custody of the kids, so you're a head-of-household for tax purposes. Opting for single on your return will cost you.
- Social Security number errors and omissions -- Leaving out these nine digits when asked will likely cause the IRS to disallow a deduction, credit or dependent you claim.
- Charitable contribution oversights -- Don't cheat yourself by ignoring charitable donations you made in ways other than just a check or credit card charge.
- Missing signature -- You must, must, must sign your tax return, either in ink if you're still going the paper route or by following the appropriate electronic signature directions.
- Busting the filing deadline -- If you don't file a return (or
extension; more on this in a minute) by April 15, you'll end up owing
Uncle Sam even more.
And for 2012 filings, there also are two specific areas where some taxpayers need to take special care:
- Homebuyer tax "credit" payback -- This applies to folks who claimed the original 2008 $7,500 non-interest loan to buy their first home.
- Roth conversion taxes -- This is the second half of the taxes due from the change you made in 2010 of your traditional IRA to a Roth retirement account.
You can get more details from my Bankrate.com story on 10 common filing mistakes to avoid.
Do take these tax breaks
At the other end of the filing spectrum, don't cheat yourself out of tax savings.
- Job hunting expenses
- Moving costs
- Retirement Saver's Credit
- Noncash charitable gifts
- Travel expenses for military reservists
- Child and dependent care costs
- Points paid to refinance a mortgage
- Many medical costs
- Educational expenses
- Energy efficient home improvements
Some of these require that you itemize. Others have a percentage of income threshold to meet before you can claim them. Others are above-the-line deductions that you can take (if you qualify) even if you claim the standard deduction. And there are a couple of tax credits, which cut your tax bill dollar-for-dollar.
But they could be worth the added work if they help reduce your tax bill. So check them out before you file your 2012 return.
Get more time for tax tasks
Finally, give yourself time to make sure you don't make a filing mistake or miss out on a tax-saving break.
Tell the IRS you need more time to finish your return. The agency will give you six more months, until Oct. 15, if you send it Form 4868 by April 15 and, if you owe taxes, send in what you owe (or as much as you can) with your extension request.
To prove that its fine with extensions, the IRS has issued some Form 4868 filing tips, as well a video about the extension process.
And don't forget about your state taxes. Most of the folks who live in a state that collects income taxes from its residents follow the federal fling deadline.
If you can't get your state returns done in time either, check with your state tax department about getting more time, too.
That way you'll be able to get your state and federal filings done correctly.
And that care could save you money by producing a smaller tax bill or get you a larger refund than you expected.You also might find these items of interest: