No one enjoys doing taxes, which probably explains why so many of us leave it to the last. Possible. Moment.
With Tax Day fast approaching (next week!), millions of Americans are no doubt scrambling to track down receipts, bank statements and other important documents in a bid to meet the April 15 filing deadline.
But the more you rush, tax pros say, the more you’re likely to make mistakes that can cost you in the form of penalties, a delay in getting your refund and even a higher risk of an audit.
So if procrastination has gotten the better of you this year—don’t worry, you’re not alone—here are a few last-minute mistakes to avoid to keep your return error-free.
1. Overlooking Income
The IRS requires you to claim all income made in 2013, regardless of whether or not you received a W-2 or 1099 from an employer. Failing to disclose income is a common issue for last-minute filers—and an oversight the IRS is keen to uncover.
“Maybe someone did one little freelance job back in February and kind of forgot about it—and forgot to include it on their tax return,” says Lindsey Buchholz, principal analyst with H&R Block’s Tax Institute. “Those are the kind of things that the IRS can catch pretty easily.” And once the IRS realizes you owe more, you’ll be on the hook for the extra tax, plus penalties and interest. So even if you only worked a side job for a day, the income you received is still taxable, and you must claim it on your return.
2. Messing Up the Math
If you’re pressed for time, put away the pencil and paper. E-filing is easier, faster and more secure than processing your returns via snail mail—and you’ll avoid the long line at the post office come April 15.
Another upside to e-filed returns: You can eliminate mistakes, like “not understanding how to apply a tax table or not doing the math correctly,” says Buchholz, adding that online software will generally catch any errors you’ve made along the way. The good news is that the IRS offers free tax software to people whose incomes are less than $58,000, and free fillable tax forms for those who earn more. Companies like H&R Block and TurboTax also offer free simplified returns online.
That said, if you still prefer to file on paper, take the time to run your figures through a software program to make sure your final tallies are correct.
3. Forgetting to Double-Check Numbers and Signatures
One of the most common tax mistakes, according to the IRS, is an incorrect Social Security number, so make it a point to check that you haven’t accidentally transposed the digits. And if you’ve opted for a direct deposit refund, you should also make sure that your bank account information is accurate.
Finally, don’t forget to sign and date the return—and have your spouse do the same if you are filing jointly. An unsigned return is like an unsigned check in the eyes of the IRS: It’s invalid.
4. Missing Out on Deductions and Credits
When you’re rushing to file, you are more likely to overlook credits and deductions that could save you hundreds—even thousands—of dollars on your tax bill. According to H&R Block, one in five filers who prepare their own taxes disregard benefits, losing out on an average of $460 in either credits or deductions.
“Education credits, in particular, are missed quite often,” Buchholz says. “There are several different kinds of benefits, and it can be hard to figure out which one you qualify for, and which benefits you the most. I think some people get stressed-out about it, and decide not to do it.”
Child care benefits are also often misunderstood, says Koreen Jervis, an enrolled tax agent with Korjé Tax Professionals in New York City. “People hear child care and they think day care,” she says. “But they forget that when their kids do summer programs, that’s also a child care expense,” and therefore are eligible for a credit.
Tax procrastinators aren’t just subject to leaving money on the table either. They also run the risk of double-dipping on deductions in their rush to file—and running afoul of the IRS. “People often forget that if they contribute to a child care flex spending account, they can’t also get the child care credit,” Jervis says. “A lot of people do that, and then get letters from the IRS.”
5. Failing to Itemize Deductions
For many people, taking the standard deduction—$12,200 for couples or $6,100 for single filers—may seem like the simplest and easiest route when doing taxes, especially if they’re pressed for time. But itemizing your deductions can sometimes save you a bundle.