Common Tax Return Mistakes: What to avoid

Accounting Series - Senior FinancesAs the April 15 deadline to file your 2013 federal income tax return approaches, you might be rushing to complete that overwhelming stack of paperwork. But if you aren’t careful, even the smallest errors can result in a rejected or audited return. Be sure to triple-check your return for these common errors before clicking that “submit” button or standing in line at the post office.

Silly mistakes. The most common tax return errors are simple, careless errors, but they can still cause your return to be rejected. Check carefully to be sure you entered all of your information on the correct lines, your Social Security number is correct, and you have signed and dated your return.

Report stock sales correctly. Many people incorrectly believe that if they sell stock at a loss, they don’t have to report this information on their tax return. But the IRS will receive a 1099 form on that sold stock, and it will look to them as if you’re attempting to hide a profit. All stock sales must be reported, whether you made a profit or not.

Claim deductions correctly. You can’t guess at the amount you may have donated to charity in 2013; keep all records and receipts in case your return is audited. As for student loans, you can only claim payments on your children’s loans if the loans are in your name. Make sure any deductions you claim are actually available to you, and that you’re claiming them correctly.

Watch out for medical and dental expenses. When you turn 65, the rules for claiming un-reimbursed medical and dental expenses change. If this applies to you, become familiar with the new rules or consult a tax professional for help.

Ask for an extension. If you find yourself rushing to meet the April 15 deadline, file for an extension rather than risk careless errors and costly omissions.

Use correct postage. If you choose to mail your return, be sure to include correct postage so that your return actually makes it to the IRS.

In addition to these common errors, one of the most frequent tax filing mistakes is failing to ask for help when you need it. If your tax situation is particularly complicated, due to things like Schedule E forms or IRA distributions, consulting a tax professional can help you prevent errors that lead to an audited and rejected returns.