Thursday, December 23, 2010

10 Tax Goofs Many of us Keep Making

Every year the IRS sees a handful of mistakes on Americans’ tax returns. Many of these errors are easy to avoid. MSN Money put together a list of the 10 largest tax goofs. How many of these mistakes have you been guilty of? You can find a few items from their list below or click here for the full article.

    Claiming the wrong status

    Sorry, you can't just choose to file single or married. Your marital status is determined as of Dec. 31. Anything before that date really doesn't matter for tax purposes. If you're married you file either jointly or married filing separately. You may qualify for "head of household," but you have to satisfy all the requirements.

    You don't qualify just because you consider yourself the head of your household. In fact, you can't be head of household if you're married unless you qualify as an abandoned spouse.

    Claiming the wrong status could kill your eligibility for the child tax credit, the earned-income credit and exemptions for dependents.

    Check out the instructions for Form 1040 detailed information to help you select your correct filing status.

    Omitting or using wrong Social Security numbers

    The Social Security numbers you list for your dependents, the earned-income credit and the child tax credit must match your dependents' Social Security cards. Otherwise, the IRS computers will reject your credits and deductions.

    If you're still doing your return by hand, put down that stone tablet you're reading and pay attention. Make sure your handwriting is legible, at least on your tax return. Although to be fair, I suspect that many of these mistakes attributed to taxpayer error actually result from bad inputting by the IRS.

Read more here

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