Posted By 
By Sia Hasan
Special to the Financial Independence Hub
No one looks forward to filing their taxes each year. The process is time-consuming and stressful no matter how many times you’ve done it in the past. Unfortunately, even the most experienced workers make mistakes when filing their returns and those mistakes can really add up.
The last thing anyone wants to deal with is a formal audit by the IRS [or, in Canada, the CRA] and the more mistakes you make, the more likely that audit is. Believe it or not, it’s possible to avoid the most common mistakes year after year. You just need to know what they are in the first place.
Ignoring late or missing W2s
Your employer is required to send out a W2 at the end of the year [the equivalent of a T-4 in Canada.] This is your wage statement that shows your rate of pay, the amount you earned and the amount of money withheld for taxes from your paychecks. While it’s possible to file without the W2, it’s incredibly difficult and often leads to errors when reporting your income. Instead of ignoring a late, missing or lost W2, get another one reissued. Speak with your company’s HR department and get them to print a new one for you. If they can’t, they’ll be able to request a new copy from the business’s accounting department.
Not paying attention to Deadlines
It’s easy to lose track of time when you’re juggling the responsibilities of busy work and social schedules on top of filing a tax return. Unfortunately, filing late can end up earning you a hefty fine and penalty from the IRS [and the CRA]. If you’re having trouble keeping track of tax deadlines, start filling out your return as early as you can. You should be able to complete the return as soon as you receive your wage statements from your employer and any additional income statements for investments or gambling earnings. You can also set reminders on your phone to help you stay on schedule.
Forgetting to double-check your Return
There’s a lot of data entry involved with tax returns. Each number and piece of information you enter needs to be correct. If there are errors, you could end up dealing with a delay or hard inquiries from the IRS.
Take your time when filing your return and double-check each line. Correct any errors you find before you submit your taxes to the IRS.
Ignoring Deductions to which you’re entitled
Your tax bill at the end of the year is based on the total amount of income you earned. The IRS knows that taxes are expensive and offer deductions to help lower your tax bill each year. However, you have to apply for those deductions. If you don’t or you miss even one that you qualify for, you’ll end up paying more than you should. Do a little research and see which common deductions you’re eligible to claim before you file. Make sure to fill out the appropriate fields for the deductions you qualify for on the return itself. The IRS doesn’t automatically grant you deductions. You still have to denote the ones you wish to claim.
Thinking you don’t have to File
Many people think that they don’t earn enough to attract the IRS’s notice and, instead of filing taxes, they’ll ignore them entirely. This isn’t just unethical: it can get you into serious trouble. The IRS will eventually find out and you’ll have to pay the amount you owe plus interest to settle your debt. If you think you can get away without filing, don’t tempt fate. File your taxes by the deadline and you’ll be okay.
Not getting professional help
Just because you can file your own tax return doesn’t mean you should. It’s almost always in your best interest to work with an experienced accountant or CPA. They understand the laws and regulations and can make sure you get the largest tax refund possible. Even better, they’ll handle the data-entry for you so you can get back to enjoying your days off.
Keep these mistakes in mind when tax season gets closer and you’ll be able to avoid making them yourself year after year.
Sia Hasan is a tech entrepreneur by day, and a freelance writer by night. Her passion lies in business technology, efficient and sleek programming, and customer relationship management. When she doesn’t have her nose pressed against her computer screen, you can find her spending time with the loves of her life, her two dogs, Pixel and Vector.
