Making a mistake on your taxes can cost you big. And nobody likes losing money. The good news is using a tax program like ezTaxReturn.com can help you get your taxes right. Here are some expensive mistakes to watch out for this year.
Choosing the wrong filing status
Your filing status affects your standard deduction, the credits you can claim and ultimately, the amount of taxes you owe. So, it’s important to choose the correct filing status. Head of household is a good option for most single parents because it saves you more money. The 2020 standard deduction for single filers is only $12,400 whereas it’s $18,650 for those filing head of household. That’s a difference of $6,250. To file as head of household, you must be unmarried, have a dependent and paid more than half the cost of keeping a home for the year.
Missing out on valuable credits and deductions
Claiming every credit and deduction you’re eligible for will help you get every dollar you deserve. Except you don’t have time to read through thousands of pages of tax code to know what’s available. That’s where ezTaxReturn comes in. You don’t need any tax knowledge to do your taxes with them. They’ll guide you step-by-step through your return and help you get the biggest possible refund.
Under reporting your income
Whether you’re self-employed or work for someone else, you must report all your income to the IRS. They receive a copy of the same income statements sent to you so don’t waste your time trying to leave anything out.
Messing up the math
Add lines 1, 2b, and 3b then subtract line 10c. Confused yet? Miscalculations are one of the biggest mistakes people make when doing their taxes by hand. So, put away your pencil and paper and use tax software instead. ezTaxReturn.com does the math for you and guarantees 100% accurate results based on your entries.
Entering the wrong direct deposit information
Direct deposit is the fastest way to get your refund, but not if you enter the wrong bank information. So, always double check your account and routing numbers before submitting your tax return. If you miss a digit and your bank rejects the deposit, the IRS will usually issue a paper check to the address listed on your return. Unfortunately, not everyone is so lucky. If you enter an account number that belongs to someone else, you’ll need to work with your bank to get your money back.
Ignoring the tax deadline
Your taxes are due on April 15th unless you request an extension. If you owe the IRS and miss the deadline, you’ll begin accumulating penalties and interest. The penalty for failing to file is 5% of your unpaid taxes for each month it’s late. If your return is more than 60 days late, the minimum penalty is $435 or 100% of your unpaid taxes, whichever is lower. The penalty for paying late starts at 0.5% of your unpaid taxes and can climb up to 25%.
Not preparing a return at all
Even if you think you didn’t earn enough money to file, prepare a return anyway. You may qualify for a refundable credit and be due a refund. The Earned Income Tax Credit is designed specifically for low-income earners and is worth up to $6,660. Start your return now with ezTaxReturn so you don’t miss out.
Misunderstanding how a tax extension works
If you need more time to prepare a return, you must request an extension by April 15th. Just keep in mind that an extension only gives you more time to file a return, it doesn’t give you more time to settle your tax bill. Even if you can’t cover the entire amount at least pay as much as you can by Tax Day to minimize the fees and interest.
Spending more than necessary to file
Why spend big bucks on something you can get for free? If you have a simple return, you can do your federal tax return free at ezTaxReturn. It’s the fastest and easiest way to get the biggest possible refund. So, start now.