Tax Danger! Avoid These Last Minute Tax Prep Mistakes
April 15th is just days away, and if you're like me, you're putting the finishing touches on your tax return. You already know to beware of the biggest audit flags, but there are a slew of other common errors you can easily avoid before dropping your Federal return in the mail.
While my recent list of audit flags was designed to keep you out of prison, this list of tax return mistakes -- courtesy of USA Today -- is a mix of advice that can help you avoid trouble with the IRS and just might save you some money as well.
1. Double check your social security numbers. If you enter the wrong social for dependents, for example, the IRS can disallow related exemptions, such as dependent care credit.
2. Check your bank account information. If you file electronically, make sure your refund is going to your bank account. If you enter a typo, the money could get deposited into someone else's account.
3. Claim charitable contributions. Many people neglect to track their charitable contributions throughout the year, so they don't claim them on their taxes.
4. Missing deductions. About 65% of taxpayers claim the standard deduction because they don't believe they have enough deductions to justify itemizing. But even if you claim the standard deduction, you could be eligible for certain tax breaks, like on the purchase of a new car or state and local property taxes.
5. Claim the Making Work Pay credit. Your refund might get delayed if you fail to properly claim the tax credit you got as a part of last year's economic stimulus package.
6. File medical expenses properly. Many people misunderstand what they can claim here: You can only deduct the amount of unreimbursed medical expenses that exceeds 7.5% of your adjusted gross income.
7. Sneak in extra savings. The party for deducting 2009 savings didn't end on December 31. You can claim contributions to certain investments -- like your 2009 IRA -- straight through to April 15th.
8. Sign your return! If you're filing a your tax return on paper because, I'm guessing, your house is not wired for electricity, don't forget to sign the return.