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| Six Tax Mistakes and How to Avoid Them This Year |
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| January 23, 2012 - Money and Taxes |
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(ARA) - Tax time is a stressful time, even for the most prepared filer. And for the many people who aren't perfectly prepared when the season rolls around, each commercial, ad or sign that mentions tax preparation can be a painful reminder that the daunting task still lies ahead.
This year, don't let yourself be affected by the stress - or at least find ways to cut back on it. By avoiding these six common mistakes, you'll be making the process of filing your taxes a lot easier on yourself.
Mistake 1: Rushing to file by April 15
If you aren't ready by the 15th, you don't need to panic. Six month extensions are now an easy-to-use option. You no longer have to give a reason about why your taxes aren't ready by the initial deadline - just fill out and file Form 4868, and you'll give yourself some extra time to get it all complete.
Mistake 2: Being a perfectionist
Of course, you can't and don't want to lie on your tax return, but you don't have to panic about making sure that each minute figure is perfect. The IRS isn't going to hunt you down and send you to jail over a simple mistake - even they understand that we're all human. If you've lost some information that's necessary to your tax return, do your best to fill it out using reasonable estimates. Don't let perfectionism get in the way of filing.
Mistake 3: Going it alone
We aren't all tax experts, and that becomes particularly clear when you start filling out the labyrinthine forms. And if you've had any major (or even minor) changes to your life this year, the whole process can get even more confusing. Getting help from a tax professional is much more affordable than you might imagine, and can pay off in a lot of ways, not least of which could be a lower overall tax bill.
Mistake 4: Not reviewing your work
You had to do it for your homework, but you should be doing it for your taxes, too. Going back to your taxes with fresh eyes can help you catch mistakes or areas that were simply missed. Check the details. Are your Social Security numbers right? Were any credits or deductions missed?
Mistake 5: Being afraid to ask questions
The old axiom "there are no dumb questions" applies to your taxes. If you're not an expert, there will almost certainly be something that you don't understand or find confusing. Luckily, there are plenty of resources out there that can answer your questions. You can go directly to the IRS website or the IRS help line, but if you still need more assistance, ask your question at Equifax's blog or check with a tax professional.
Mistake 6: Not being careful with direct deposit
The advent of direct deposit has been a benefit to those waiting for their tax refunds, but you have to do the footwork for the IRS. They can only deposit the funds into the account you tell them to use, so make sure that the information you provide is correct. If there's a mistake and your money is deposited into the wrong account, it's a nightmare, at best, to get it back. At worst, you might not get it back at all.
Preparing taxes might never be your favorite activity, but it doesn't need to be a painful experience. Get the help you need, be cautious and don't let the stress get to you - tax season will be done before you know it.
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