Now! Is the time to organize and get prepared for Filing your TAXES!
For many filing taxes may illicit lots of emotions and the process can simply be overwhelming. We wanted to provide you with some information on the common mistakes and conversely, give you some helpful tips. Hopefully, saving you time and costly penalties or interest payments later…
First, the Common Mistakes …
- Filing too early. While taxpayers should not file late, they also should not file prematurely. People who don’t wait to file before they receive all the proper tax reporting documents risk making a mistake that may lead to a processing delay.
- Missing or inaccurate Social Security numbers. Each SSN on a tax return should appear exactly as printed on the Social Security card.
- Misspelled names. Likewise, a name listed on a tax return should match the name on that person’s Social Security card.
- Entering information inaccurately. Wages, dividends, bank interest, and other income received and that was reported on an information return should be entered carefully.
- Math mistakes. Math errors are some of the most common mistakes. They range from simple addition and subtraction to more complex calculations.
- Figuring credits or deductions. Taxpayers can make mistakes figuring things like their earned income tax credit, child and dependent care credit, child tax credit, and recovery rebate credit.
- Incorrect bank account numbers. Taxpayers who are due a refund should choose direct deposit. This is the fastest way for a taxpayer to get their money. However, taxpayers need to make sure they use the correct routing and account numbers on their tax return.
- Unsigned forms. An unsigned tax return isn’t valid. In most cases, both spouses must sign a joint return. Exceptions may apply for members of the armed forces or other taxpayers who have a valid power of attorney.
Second, Helpful Tips…
Each tax season comes with unique challenges and 2022 is no exception. Following these tips should help get this year’s taxes done accurately and refunds issued timely.
- Gather records. Good recordkeeping makes preparing a tax return easier. It can also ensure taxpayers do not overlook deductions and credits. Pull together your W2’s, bank interest statements, 1099’s, property tax statements, mortgage interest statements. If you itemize make your list of organizations to whom you contributed.
- Start with IRS.gov. IRS.gov is available around-the-clock and it’s the fastest way to get assistance. Millions of people use IRS.gov for filing and paying taxes, getting information about their accounts or answers to tax questions.
- Use online tools. IRS.gov has many useful online tools. The Interactive Tax Assistant provides answers to many tax questions specific to an individual’s circumstances. It gives the same answers that an IRS representative would give over the phone.
- Report all income. Taxpayers must report their taxable income from all sources, including the gig economy, Forms W-2, Wage and Tax Statements, and Forms 1099. Other income may be taxable, even if the taxpayer does not receive a statement.
- Access online account or review IRS letters. This year, people must have the total amounts of their advance child tax credit payments and their Economic Impact Payments on hand when filing. Check online account or review Letter 6419, 2021 Total Advance Child Tax Credit Payments, and Letter 6475, Your 2021 Economic Impact Payment, for their total payment amounts to help them file an accurate return.
- Report unemployment benefits. Taxpayers who received unemployment benefits in 2021, must report the amount as taxable income on their tax return.
- Choose a reputable preparer. Taxpayers can self-prepare or use a tax preparer. IRS.gov has resources to help people choose a tax pro. The IRS Directory of Federal Tax Return Preparers provides information on who has a professional credential.
- File electronically. IRS Free File online can help taxpayers claim their earned income tax credit, child and dependent care credit, child tax credit and recovery rebate credit.
Do not hesitate to call on the WPC Team for answers or assistance regarding your tax prep questions. We enjoy helping clients navigate the complexity and find solutions to their financial concerns. Remember the tax filing deadline for your 2021 tax returns is Monday, April 18th, 2022.