Tax Return Mistakes to Avoid

Tax serves as a burden to business. However, they’re the lifeline of the government. Taxes cut your profits. On a couple of occasions, they compel you to pay more whenever there are errors on your tax return.  

Every year, the IRS needs you to submit a tax report. There’s a possibility that they’ll enforce a fine if you made mistakes on your tax return. They can even add interest for each month the error goes unfixed.  

Mistakes can be avoided easily. You can save yourself the trouble of being fine with the help of an individual tax returns North West Melbourne service.  

Today, we are going to share with you the common mistakes that you should avoid with your tax return. 

Misspelling Your Name 

This is one of the most frustrating mistakes on the tax return. For those who don’t know, the IRS utilizes the first four letters of your last name to check your social security number and its exactness. 

They’ll reject your return if you misspelled your name. They’ll require you to submit records once the mistakes in your tax return are identified.  

Of course, this will waste your time and energy.  

Incomplete Records 

Small businesses are required always to submit a complete book of accounts. These include your income yield, depreciation of cars and equipment, and medical expenses.  

You’re required to submit Form 1065 if you run as a partnership. You’ll be penalized $200 every month for every partner if your records are not complete.  

Fortunately, before the penalty is assessed, the IRS offers you a chance to review your information if they notice an error.  

Failure to File a Tax Form 

For every sole proprietor who earns a profit, a Schedule C form is a necessity. The IRS will enforce a fine if you fail to do so. 

You’re required to submit Schedule C together with your Form 1040 if you make more than $400 every year. These forms show the amount of loss or profit you incur per taxable year. In addition to that, you’ve got to attach forms in front of the return. 

For instance, you have to attach your W-2 forms if you’re subject to withholding taxes. This will include their appropriate schedules. 

You need to attach the records that prove this eligibility if you’re eligible for homebuyer’s credit or adoption credit.  

A Miscalculation on Form 1099 and W-2 

This is one of the most popular mistakes on your tax return. This mistake occurs whenever the IRS sees that the income derived from other sources doesn’t match the income on your tax return. 

They’ll recalculate the amount due if they see this error. They’ll send you a bill that indicates the applicable interest, penalties, and tax upon determination of the real value.  

Upon receipt, you have to review your bill. The IRS often makes errors in determining the taxable amount.  

If you don’t want these mistakes to happen, hiring a professional accountant is your best bet. They can help you with tax returns and other financial obligations you have.  

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