Top 10 tax mistakes when filing
Tax mistakes to avoidPhoto: Video by fox4now.com
WFTX - With the tax season in full swing, preparing your tax documents too fast is a dangerous proposition often resulting in costly oversights and errors. The executives at Kars4Kids, a national leader in car donations for over a decade, compiled a list of some of the most common mistakes people make when filing.
1. Forgetting to claim a car donation deduction:
If you donated a car in 2012 to a reputable car donation charity, you don’t want to forget to claim that deduction. Not sure if you are eligible or what information you’ll need to provide? Kars4Kids has created a handy Accountants Guide to Car Donation which is easy enough for the average person as well.
2. Forgetting the stamp on your envelope:
Thousands of people every year completely forget the stamp when mailing out their return, or they remember the stamp but use insufficient postage. Luckily, a return that’s a little late will usually incur no more than a small penalty. From Investopedia’s, Personal Income Tax Guide.
3. Forgetting to sign your return:
Another common mistake is forgetting to sign your return. Unsigned returns are considered by the IRS as if they were never submitted, and the IRS may not notify you for a month or more. By then the penalties and interest may already be adding up.From Investopedia’s, Personal Income Tax Guide.
4. Home improvements:
There are many home improvements that are eligible for a tax credit. Things like new windows, doors, roofs, and many other improvements may be eligible. Don’t forget to file for this credit. See the full article from Earth911 for more details.
5. Filing correctly for those home improvements:
If you will be filing for home improvements, Houselogic warns that some items can be very complex to file for, after you’ve come this far you don’t want to lose out on this credit because of a simple filing error. Read the directions carefully.
6. Environmentally friendly vehicles:
Tax breaks are available for those who purchased an electric vehicle or a plug-in-hybrid in 2011, don’t forget to maximize the benefits of being a good friend of the planet. From Earth911.
7. Federal student loans:
Payments made on federal student loans last year may be eligible for a tax deduction using Form 1098-E. Students of the world, this is your big chance, don’t blow it! More info at ed.gov.
8. Private Mortgage Insurance:
If you bought your house with a down payment of less than 20% you were probably required to purchase private mortgage insurance. If your adjusted gross income is less than $109,000 you may be able to deduct those payments, which can add up. Source and more info at Houselogic.
9. Political Tax Credit:
States like Oregon allow you to claim a tax credit for contributions made to a political group. Check if this credit is available in your state as well. If it is, it’s like free money.
10. Save money with free online filing:
If you want to save more money, file online for free. Two of the more popular tools are Turbo Tax, and H&R Block.