As we push through February, you might be one of the millions of Americans waiting for their tax return. The 2019 tax season is underway and the IRS is anticipating your filing. With the deadline set at April 15th, many are tasked with deciding whether they are going to file early. It seems like a no-brainer. Why wait until the final stressful week?
There are other benefits to filing early. One benefit includes thwarting anyone from filing in your name. It happens as identity thieves try to steal your tax return. The best reason, of course, is to get your refund back quicker. Despite these reasons, many people put it off until the last minute.
Sure, when you file is completely up to you. But when you do, you must be careful to avoid any of the numerous tax mistakes Americans make each year. If you do file early, making a mistake can derail your return. Here are fix tax filing mistakes people make and how to avoid them:
1) Forgetting Any Forms
It’s understandable that tax forms aren’t always easy to read. You may not know which forms you need to have in front of you before filing. If you have multiple incomes, then you’ll need a 1099 or W-2 from your employer. The can be a delay in processing your return if they receive a matching copy without your submission.
This can also lead to penalties, fines, and even an audit, which is something we all want to avoid. Employers have a deadline of January 31st to send all appropriate forms to their employees. This ensures they have the right forms when it comes time to file.
2) Forgetting or Ignoring 1095 Health Form Requirements
One big thing you have to do before filing your tax return is proving you have health insurance. The IRS made it a requirement and will reject your return if you can’t verify your coverage. Yes, the new law does remove the mandate, but it won’t go into effect until the 2020 year. Whatever you do, don’t forget to add your healthcare information to your tax return.
3) Not Double-Checking Your Information
Mistakes happen to the best of us. The last place you want to make one is on your tax forms! You should ALWAYS look back over your forms to ensure that you’ve:
• Signed the document
• Double-checked your math
• Are using the correct year’s forms
• Have every appropriate box filled out
• All your information is written legibly
You may want to get your tax return finished quickly, but don’t be in too much of a hurry. It’s easy to forget or overlook something when you’re just trying to get it done. Review all your information, even twice if you have to. You’ll be glad you did in the end rather than facing a penalty, rejection, or even audit.
4) Filing Amended Tax Forms Incorrectly
You may not know when it’s important to send an amended form if any mistakes were found. But you should only do it if there has been a change in your income modifications, deductions, or filing status. You don’t need a new 1040 to start over, but rather 1040X which is an update to what you already filed. You can’t do this electronically, though. Only paper copies.
5) Forgetting 2019 Contributions
In some instances, some investments you make in 2019 are still categorized until the 2018 year. For example, contributing to your IRA. As an example, any payments made to your IRA before April 15th, 2019 are considered to be towards the 2019 year. That’s just how the years stack up. If you already filed your taxes for 2018, you’ll have to file an amended return.
http://financialhelpers.com/millennials-have-different-retirement-goals-than-older-generations/
The main lesson for filing early is, it’s worth it, but you don’t want to make any mistakes. It’s never a good idea to rush through something just to get it over with. No one likes to sit down and figure it all out, but when you do, do it right. Check your work, fill out the forms properly, and make amendments where necessary.
Think about your tax return as an investment. You put the proper amount of work into it and it will work out in your favor in the end.
