Tax-filing tips: 8 tax mistakes to avoid

Your tax reform questions answered
Your tax reform questions answered

The April 17 tax filing deadline is less than a month away, so if you haven't submitted your return, it's time to get moving.

But that's no reason to rush through it.

Whether you decide to go it alone or hire a tax preparer to help, make sure you avoid these costly mistakes.

1. Making careless errors

Blame it on fat fingers, deadline pressure or plain carelessness, technical errors like the wrong Social Security number, name misspellings or a simple math error can cause problems and delays with your return.

Tax software programs can flag errors like this, but every filer should still pay close close attention when reviewing their returns before sending them in, particularly pen-and-paper filers.

2. Using the wrong filing status

There are five filing options: single, married filing jointly, married filing separately, head of household and qualifying widow/widower with dependent child.

Choosing the right status is important as it affects how much you pay in taxes. For instance, filing as head of household provides more benefits than married filing separately, explained Mark Steber, chief tax officer of Jackson Hewitt Tax Services.

3. Forgetting to report income

Uncle Sam needs to know about all your sources of income last year: your salary, side-hustle cash, retirement withdrawals and gambling winnings. All of it.

So don't leave anything out. If you get caught with unclaimed income, you could get hit with major penalties.

4. Hiring a pro when you can DIY

Some people have very complicated tax situations where an expert needs to be brought in. But many Americans have simple filings that might not require professional assistance, the experts said.

If you have an adjusted gross income of $66,000 or less, check if you can file your federal taxes for free using the IRS's Free File software options.

Related: 3 tax preparation tools to tame your taxes

5. Not taking all eligible deductions

Don't leave money on the table or pay more in taxes than you have to.

Take the time to figure out which credits and deductions you're eligible for to reduce your tax liability and get as much back as possible. The IRS isn't going to tell you if you missed a valuable credit you could have claimed, said Steber.

The Earned Income Tax Credit, for example, is commonly overlooked, with about one in five eligible taxpayers missing out on it, according to H&R Block. It's a sizeable credit with an average amount of more than $2,400.

Related: 11 tax deductions and other ways to cut your 2017 tax bill

6. Being disorganized

Tax forms tend start rolling in at the start of the year that detail your sources of income.

Some forms will come in the mail, while others can be retrieved electronically. Just be sure to collect them all before you file.

Lisa Greene-Lewis, a CPA and tax expert from Turbo Tax, suggested keeping a folder by your mail so you can instantly drop the paperwork in and keep everything in one place.

It's also helpful to keep an updated log throughout the year for things like mileage and charitable donations that you plan to claim on your return.

7. Procrastinating

Tax season comes every year, there's no escaping it.

While the actual deadline may vary (read why here), you know you have to send in your taxes every April. Yet many Americans scramble to get their returns in.

By waiting until the last minute, you increase your risk of mistakes.

Related: What's the penalty for filing taxes late?

8. Not filing a return

Not everyone has to file a tax return. But even if you don't have any tax liability, it could be in your best interest to file anyway.

The IRS will only issue refunds to filers. So if you had too much federal taxes withheld from your paycheck or are eligible for other credits, you have to file a return to get the money.

Earlier this month, the IRS said it had $1.1 billion in unclaimed federal income tax refunds for around 1 million people who didn't file a tax return in 2014.

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