This past week, the country’s chief economic adviser unveiled President Trump’s new tax plan. The sweeping tax overhaul, collapsing tax brackets from seven to three, is just being introduced and has an uphill battle in Congress. But all of this talk about taxes has me thinking about tax returns already, nearly half a year before filing is due.
As a CPA, who happens to be a bookkeeper, I work on lots of company books, but I also help file tax returns; the two go hand in hand. Without well-kept books, you can’t have a correct tax return. But even if your books are updated frequently, it’s easy to make a tax mistake that will catch the IRS’ eye; nobody wants that. So today I’m going to focus on avoiding tax return mistakes that could result in IRS problems. Here are the most common mistakes:
- BAD MATH – Remember when your teacher used to tell you to double check your math for any mistakes? Well, the same goes for you and your accountant, make sure to double-check the math. At Brigade Bookkeeping, we always double and even triple check our numbers. In my book, an accountant who gets the math wrong, shouldn’t be doing your tax return. Great tip: if you plan to do your taxes yourself, use a software program because it does all the math for you.
- WRONG INFORMATION – Whether you do your own tax return or your accountant does it for you, make sure you enter the correct information. It’s easy to make a mistake entering a Social Security number, but that could be a big red flag for the IRS.
- WRONG FILING STATUS – Believe it or not, every year, one of the big mistakes people make on their tax return is entering the wrong status. That means some people enter head of household instead of single or married filing jointly. You can double check your status by logging onto the IRS website at IRS.gov for specific categories.
- UNSIGNED DOCUMENTS – Did you know people forget to add their John Hancock or signatures on documents all of the time? A big and glaring mistake that the IRS says happens all of the time is people turning in their tax return without signing or dating it. Make sure you sign and date all tax returns and if you’re a couple filing jointly, remember you both have to sign on the line.
Making a mistake is human, but you want to try to avoid mistakes on your tax return, because it could cost you. A returned tax return could result in the IRS considering your tax return late and that could result in a penalty.
This upcoming tax season, I invite you to reach out to me or the members of my Brigade Bookkeeping team. We want to help you with your books and help you get it right. So e-mail me or give me a call. Until then, follow your teacher’s advice, check and double check your work. Have a great week!