For Mark Roberts’ Use: Each spring, we all sit down with a calculator and piles of documents, and we file our tax returns. Despite efforts at simplifying the process, many of us still make mistakes. In fact, the Government Accountability Office says that a small undercover study in February detected errors in 17 out of 19 returns! If you’re ever audited, those mistakes can really come back to haunt you. Avoid these six common mistakes when you file your return.
Record your charitable contributions deductions correctly. The first rule to remember is that only donations to IRS-qualified charities can be counted on your tax return. Second, keep all of your receipts to back up your claims; otherwise, if you’re audited and don’t have proof of your donations, you could lose the deduction. Finally, remember to claim charitable contributions correctly. If you receive anything in return for your donation, then you can only claim the amount of your contribution that exceeds the value of that item.
Include your state income tax refund. Did you receive a state income tax refund last year? Remember to add that amount to your overall taxable income. Many people forget to do this, and it could be important.
Claim your winnings. Most people consider gambling in casinos to be a form of entertainment, not income. But you’re required to report any winnings on your federal income tax return, so make sure to keep that special statement from the casino and enter the correct amounts on your tax forms.
Deduct your real estate taxes. If you purchased any type of real estate during the year, you probably paid some taxes. Remember to count this amount toward your real estate tax deduction.
Take your time. Most mistakes are made when we get into a rush. Don’t wait until April 17 to start your tax return, or file for an extension if you know you don’t have time right now. It’s better to take the extension than rush and make significant errors on your return. Of course, if you do take the extension, remember not to procrastinate until the last minute in October! Otherwise, you could still get into a hurry and make mistakes.
Sign your return. The most common tax return mistake is a ridiculous one; many people just forget to sign their returns! Make sure you’ve correctly signed it before mailing it off to the IRS.