7 common tax return blunders to avoid

Although tax laws change every year, you can count on certain things to be timeless. That includes the same common mistakes taxpayers with simple and complex returns every year. Knowing what those common errors are will help keep you in the clear.

  1. Not reporting all of your income. Employers send Form W-2s, but what if you do freelance photography or consulting for extra spending money? You may not receive a Form 1099 for that work but you still have to report the income on your tax return.

    "This type of income is reported on IRS Schedule C as part of your Form 1040," says TaxAct spokesperson Jessi Dolmage. "DIY solutions like TaxAct make it easy – just answer simple questions about your income and expenses. The program will take care of the calculations and tax forms while helping you get all your deductions to maximize your refund."

  2. Not taking full advantage of IRA contribution limits. IRA contributions are one of the few tax benefits you can still take advantage of through April 15. For tax year 2014, traditional IRA (Individual Retirement Account) contributions up to $5,500 ($6,500 if you're age 50 or older) are tax-deductible. The same contribution limits apply to Roth IRAs as long as your modified adjusted gross income is below $114,000 ($181,000 for joint filers). Incomes above that are subject to a reduced deduction.
  3. Not double checking bank account and routing numbers. Whether you're getting a refund or you owe Uncle Sam, double check account numbers. Just one or two incorrect digits can mean a lost refund or penalties and interest because the IRS didn't receive your payment.
  4. Miskeying SSNs or using unofficial names. Believe it or not, these are one of the most common reasons tax returns are rejected. The IRS verifies Social Security numbers and names with the Social Security Administration when processing returns. Importing last year's tax return information helps, but always double check that the numbers and names exactly match Social Security cards.
  5. Paying too much to do your taxes. Everything you need to prepare and file your taxes affordably, and even free, is right at your fingertips. Whether you file on a computer, tablet or smartphone, all taxpayers can file federal returns free with TaxAct Free Federal Edition. Unlike other free solutions, TaxAct includes all e-fileable IRS forms and schedules for complex returns – no restrictions.
  6. Not e-filing. Electronic filing is the fastest, most accurate way to file your tax return. Advanced encryption and transmission methods keep your information secure. The IRS typically processes e-filed returns within 48 hours, typically within minutes, which means you'll have your refund sooner. E-filing also allows you to receive email and text notification as soon as your return is processed.
  7. Procrastinating. Rushing leads to errors. Chances are you won't regret taking a little extra care on your income taxes, one of the most important personal finance tasks you do each year.

Start your tax return as soon as possible. You may need to request information from your employer or financial institution. If you experienced life changes, you may need a bit more time to claim additional deductions and credits. Even if you owe taxes, you can still file now and schedule electronic payment any time before April 15.

Regardless of when you file, do it by April 18 or risk paying penalties and interest. Get more tax tips at www.irs.gov and try TaxAct risk-free at www.TaxAct.com

September 2017
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Upcoming Tax Dates

September 5 — Everyone
Federal Holiday (Labor Day) Details

September 10 — Communications and air transportation taxes under the alternative method.
Deposit the tax included in amounts billed or tickets sold during the first 15 days of August.

September 11 — Employees who work for tips
If you received $20 or more in tips during August, report them to your employer Details

September 14 — Regular method taxes
Deposit the tax included in amounts billed or tickets sold during the last 16 days of August.

September 15 — Individuals
Make a payment of your 2017 estimated tax if you are not paying your income tax for the year through withholding (or will not pay in enough tax that way). Use Form 1040-ES. This is the third installment Details

September 15 — S Corporations
File a 2016 calendar year income tax return (Form 1120S) and pay any tax due. This due date applies only if you timely requested an automatic 6-month extension Details

September 15 — Partnerships
File a 2016 calendar year return (Form 1065). This due date applies only if you were given an additional 5-month extension Details

September 15 — Corporations
Deposit the third installment of estimated income tax for 2016 Details

September 15 — Social security, Medicare, and withheld income tax
If the monthly deposit rule applies, deposit the tax for payments in August.

September 15 — Nonpayroll withholding
If the monthly deposit rule applies, deposit the tax for payments in August.

September 27 — Communications and air transportation taxes under the alternative method.
Deposit the tax included in amounts billed or tickets sold during the last 16 days of August.

September 29 — Regular method taxes
Deposit the tax for the first 15 days of September.

September 29 — Regular method taxes (special September deposit rule)
Deposit the tax for the period beginning September 16 and ending September 26.

September 29 — Communications and air transportation taxes under the alternative method (special September deposit rule).
Deposit the tax included in amounts billed or tickets sold during the period beginning September 1 and ending September 11.

September 30 — Wagering tax
File Form 730 and pay the tax on wagers accepted during August.

View More Tax Dates