Filing tax refunds is a tedious task but it is also important. More than 150 million tax refunds are submitted to the IRS (Internal Revenue Service) and there are many erroneous tax refund filings.
If you make a mistake while filing for your tax refunds, you may have to go through a lot of troubles to get it corrected. Sometimes, it could even lead to you having a hard time to get your refund.
Mistakes to avoid making when filing for tax refunds:
- Entering inaccurate information
One of the most common mistakes is entering incorrect information. This may lead to missing out on valuable credits. IRS rejects tax refund files which have misspelled names or social security numbers. If you have made a mistake, you may have to correct and resubmit it and this may take a longer time.
Entering a wrong bank account number for your direct deposit is a mistake you should avoid. The IRS won’t know of the mistake until the bank rejects it. Thankfully, in such cases, the IRS sends a paper check but it takes around 6 to 8 weeks.
Additionally, if incorrectly add the wrong income amount, you won’t be able to correct it unless the IRS tells you about it. The IRS learns about through employers and this may elongate the process. - Not deducting property taxes
In the US, property taxes are deductible in the year it is paid. Sometimes, it is collected twice a year. Generally, the taxpayers forget the payments of their tax return. This, in turn, causes a tremendous loss of thousands. - Overpaying state taxes
Working in multiple states requires your employer to submit taxes accordingly. This becomes tricky as every state has its own rule for state taxes. So, what you have to do is calculate the wages yourself instead of relying on your payroll provider. When you work in a different state you have to pay only the taxes on the salary you have earned for the time period you worked there. The average state income rate is 4%, so if you miscalculate the wages, it will result in overpaid taxes. - Late filing or not filing tax refunds
Many taxpayers fail to file their tax returns due to the fear of mistakes or they forget to file it at all. Additionally, once you have missed a year it gets difficult to back onto the track. In such a case, you may take help from a tax advisor to help you figure out ways to catch up with the routine. - Not following the latest tax news
The Tax code is complicated but changes slightly every year. Therefore, you need to stay updated with the IRS news pages for important updates. People miss out valuable deductions due to lack of information about taxes and this affects their tax returns.
