Tax season is here. Open the calculator on your computer and dig out your shoebox of receipts. Next, gather your tax forms and W-2s, and get to work. Whether you choose to go it alone, use an online tax-prep program or hand it over to an accountant, make sure to avoid the six most common tax-filing mistakes.
A small miscalculation can throw off your numbers and possibly trigger IRS scrutiny. However, you choose to prepare your taxes, be sure to triple-check the math before filing.
Name changes and misspellings
If you use a name other than the one the IRS has on file for your Social Security number — even a misspelling — can mean trouble when you file. If you’ve recently changed your legal name, be sure to inform the Social Security Administration.
Omitting extra income
Did you have a secondary source of income last year and didn’t receive a tax form for it? If so, complete and submit a 1099-MISC.
Deducting funds donated to charity
First, only donations given to an organization with tax-exempt status can be deducted from your taxes. Second, food items, gently-used clothing and household items that you donated may be eligible for a write-off. Finally, calculate the value of your non-monetary donations according to what they would be worth if you’d sell them now. Don’t forget to include those charity tax receipts when you file!
Using the most recent tax laws
There were major changes to the tax code in 2017 that are taking effect as you file your taxes for 2018. Here are some changes that are effective now:
- The standard deduction increased to $6,350 for single, $9,350 for head of household, and $12,700 for married filing jointly.
- The maximum earned income tax credit increased to $6,318.
- The maximum income limit for the Earned Income Tax Credit increased to $53,930.
- Annual deductible amounts for Health Savings Accounts increased to $3,400 for individuals only.
Signing your forms
If you’re filing via U.S. mail, be sure to sign and date wherever necessary. Also, get a receipt to confirm your mailing. If filing online, you can use a PIN instead.
Check your forms for errors before submitting and file with confidence!
Article provided by Local Government Federal Credit Union.
The advice provided is for informational purposes only. For additional guidance contact your tax advisor.