TotTax

View Original

Common Mistakes You Might Commit on Your First Tax Filing

Quick Summary: If you're new to tax filing, you're probably nervous about making a mistake that could delay your next refund. Even a small mistake can hold up your refund or even lead to the IRS sending you a letter. It can also result in an audit. Quite nerve-wracking, isn't it? You can't avoid filing your taxes, but you can avoid future problems by learning about the most common mistakes people make when they file.

Common Mistakes You Might Commit on Your First Tax Filing

Mistake 1 - Filing a Return on Paper

If you've never filed your taxes before, you may be used to picking up a pen and writing your Social Security number, address and name in the blank spaces at the top of your tax return. Your parents and grandparents probably did that too.

But that was in the 'olden days,' before the digital age. Today, filing a tax return is all done electronically. In some cases, you can file a return electronically even if you don't have any income to report.

You may still need to print and mail a paper return to your state, but otherwise, you should not be sending a paper return to the IRS. Even if you do, it's still a good idea to file your taxes electronically. The IRS will process your return more quickly, and if you file electronically, you can record your payment immediately.

Mistake 2 - Not Knowing the Exact Amount of Your Deductions

If you're new to filing, it may not have occurred to you to track your expenses, especially ones like mortgage interest, charitable donations, and college tuition. These missing deductions can delay your refund, and if your claim is too low, you may be contacted by the IRS to provide more information.

If you can demonstrate that you're entitled to claim more deductions, then you can file an amended return.

Mistake 3 - Not Knowing Which Tax Form to Use

If you're filing a tax return for the first time, it's easy to be confused about which form to use. There are at least twenty variations to choose from, and some of them were last available in the early 2000s. If you're unsure which form to use, check out our guide to choosing the right tax form for your situation.

Mistake 4 - Claiming an Exemption for a Dependent Without Being Sure You Can Do So

Dependents can help you lower your tax liability. It's worth claiming your children and other dependents, but only if you can do so. In order to claim someone as a dependent, he or she must meet certain criteria.

To do so, they must be a relative, such as a child or a parent. They must also live with you. The IRS is strict about this. To prove it, you must be able to provide the name of the person who provided the dependent with more than half of their support, along with the amount. If you can prove the relationship, the IRS will authorize you to claim the exemption.

Conclusion

Even if you're new to filing, you can avoid common mistakes like these. It's really quite simple. File your taxes with the help of a tax professional. This will allow you to claim your dependents and deductions and avoid the common mistakes mentioned above.

If you need a personal tax accountant in Denver, come to Tottax! The experts here at TotTax can help you manage your complicated personal taxes and create a plan to move forward into the future.