It may seem like common sense, but going back over the information you enter may be the most important part of your tax filing duties.
It’s tax time. And as you work with your advisor or tax preparer to maximize your refund, or at least minimize what you owe, keep in mind that one of the most important things taxpayers can do to limit errors is to double-check the information they input into software or a printed form.
It may seem like common sense, but going back over the information you enter may be the most important part of your tax filing duties. It’s easy to put a figure on the wrong line – in fact, one of the most common errors is not putting in the right Social Security numbers for you, your spouse and your dependents. An error like that can cause a significant delay in the processing of your return or, even worse, could trigger an audit.
So make an effort to recheck what you’ve entered before moving to the next line or screen. While you’re going back over your return for wrong entries and typos, take the time to look up numbers such as cost basis for investments sold and real estate tax paid, rather than estimating. And double-check your math, too, because simple miscalculations can commonly lead to errors as well.
Here are a few other tax filing tips:
- If you looked for a new job last year, add up the cost of creating resumes, employment agency fees and travel expenses for interviews for jobs in your current line of work. These expenses may be tax deductible should you itemize, although many taxpayers will likely take the new standard deduction instead.
- Reduce your taxable income by making contributions (right up until the April filing deadline) to tax-advantaged accounts like a health savings account, traditional IRA or SEP IRA if you have self-employment income.
- Review the income limitations for breaks such as deductible IRA contributions, which rise annually. Depending on how your tax situation has changed, you might be eligible now even if you weren’t before.
- If you work out of your home, rather than laboriously itemizing for your home office deduction, consider using the simplified option of calculating $5 for every square foot of your home you use as your office, up to 300 square feet for a maximum deduction of $1,500.
- File your taxes electronically. It’s the safest, easiest and fastest way to file your taxes, and you will get your refund quicker if you request direct deposit.
Be aware that the IRS never contacts taxpayers by email. If you receive an email appearing to come from the IRS about your returns, beware. It is likely a phishing attempt to get you to share sensitive information about yourself. If you receive an email like this, forward it to email@example.com.
It’s always wise to seek the help of a professional. If you don’t already have a tax advisor, consider working with one this year to see if together you can uncover new ways to turn your tax return in your favor.
Withdrawals from tax-deferred accounts may be subject to income taxes, and prior to age 59½ a 10% federal penalty tax may apply. Raymond James does not offer tax advice. Please consult your tax advisor for questions regarding your tax situation.