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Avoid These 3 Common Tax Filing Mistakes

  • 24 March 2016
  • Author: Cari Holbrook
  • Number of views: 2851
Avoid These 3 Common Tax Filing Mistakes

Done with your taxes? Are you sure? Nothing is more frustrating than handing over your taxes and then realizing you overlooked some major deductions or—worse yet—made mistakes that could cost you.

1.     Overlooking life changes

While you may not feel like inviting your tax preparer to your wedding or baby shower, it’s critically important for them to know about these life events in the year they happen. Why? Because they can alter your tax liability or your filing status. So just how much of your life should you share with a tax professional? Be sure they know about these changes as they occur:

  •  Loss of a job or a job change, including retirement
  • Change in business status (if you’re a business owner)
  • An increase (or decrease) in salary
  • Health changes that may fall under disability
  • Health insurance changes
  • Marriage or divorce
  • Birth or adoption of a child
  • Change in residence
  • Death of a family member

2.     Forgetting to claim deductions

It’s a tax preparer’s job to find as many deductions as possible for you, but their hands are tied if they don’t know about large purchases you’ve made or capital losses you’ve experienced. Some of the most common among these overlooked deductions are:

  • Reinvested dividends
  • Charitable contributions
  • Student loan interest
  • Job hunting costs (or moving expenses for a new job)
  • Military reservists’ travel expenses
  • Deduction of Medicare premiums for self-employed
  • Child care credit

3.     Not signing forms

It’s silly to think that with all the complications taxes can present, simply forgetting to sign on the dotted line is often the one thing that can derail a timely tax return. But it’s true. The IRS takes signatures very seriously, and so should your tax preparer.

According to the IRS, signing documents digitally can be done two different ways. First, a taxpayer can enter their own Personal Identification Number (PIN) directly into the electronic return after reviewing the completed return. Or a Taxpayer, after reviewing the return, may authorize a tax preparer to enter a PIN on their behalf, in which case the taxpayer must review and sign a completed signature authorization form,  Form 8879, IRS e-file Signature Authorization. ( Form 8878, IRS e-file Authorization for Form 4868 and Form 2350, which authorizes tax preparers to enter the taxpayers’ PINs on Form 1040 extension forms, may also be necessary.) 

Most taxpayers who use an outside tax preparer will opt for the second option. However, an IRS e-file Signature Authorization form must be signed by the taxpayer before a return can be filed. This, unfortunately, is not something your tax preparer can do for you. If you’re a Bankler client, however, we likely already have this on file for you as a preferred service.

Getting expert help with taxes is an excellent idea, but assist your tax preparer in helping you by paying attention to these three details. Not sure if you’ve remembered everything? Contact us to make sure your bases are covered.  

Image Copyright: olegdudko / 123RF Stock Photo




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