6 Common tax mistakes and how to avoid themPosted: Updated:
PHOENIX -- It's that time of year -- tax time. As the clock ticks down to April 15, many people are starting to enter tax-panic mode. Don't. You still have plenty of time, and you can get more if you need it.
If you are ready to roll, don't rush it. That leads to mistakes, which can mean a delay in your refund or even a penalty fee.
Phoenix certified public accountant Robert Hockensmith, also known as the AZ Money Guy, ran down some of the most-common errors for 3TV's Stella Inger.
When you wait until the last minute, things get lost in the cracks, including deductions for which you are eligible.
2. Math errors
Check your math, even if you use software.
"A lot of people don't realize that math is the No. 1 reason why tax returns are returned or changed or adjusted," Hockensmith explained. He said filers rely heavily on their software and that's not always a good thing.
"There are many questions that you have to answer on the computer program that the computer won't know how to answer and it can cost you bad math problems."
3. In the case of divorce, only one parent can claim a child as a dependent
"In the IRS' eyes, it's first-come, first-served," Hockensmith said. "Whoever files and claims that child first is the one who gets the benefit even though they may not be entitled to it."
4. Make sure to sign your return!
"There's actually a frivolous tax return penalty up to $500 that the IRS can levy is you don't sign your tax return," Hockensmith said. "A lot of tax protesters will send in the tax return and not sign it because they say they're not responsible if they don't sign it."
5. Make sure you send your paperwork to the right address.
If you owe, you send your information to San Francisco. If you're getting a refund, the paperwork goes to Ogden, Utah.
6. Double check your name and Social Security number.
Make sure they match, especially if you are married filing jointly, or are recently divorced.
"Now they check the names against the Social Security Administration and if they don't agree, they reject your tax return."
Also keep in mind
If you owe, you have several options when it comes to settling up, including payment plans that give you up to five years to pay if owe $50,000 or less.
If you don't have everything you need or you're just not ready to do your taxes, you can file an extension -- Form 4868.
"It allows you to actually send your tax return in late," Hockensmith said. "You're still supposed to send in what you think you owe if you owe, but at least if you don't, the penalty is one half of 1 percent with an extension. Without an extension, it's 5 percent of the tax that you owe. Big change."
Hockensmith said you should keep copies of all of your paperwork, and if you opt to mail your returns, be sure to use Certified Mail.