Avoid the Typical Errors on Your 1040EZ Tax Return
Every year, when tax time rolls around, most of us begin looking for the simplest way to handle paying our taxes so we can get on with our lives. For many people, the quickest and most convenient solution ends up being the decision to use a 1040EZ tax return as opposed to the more complex formats of the 1040A or 1040. As uncomplicated as your 1040EZ form is, it is still easy to make errors when you are filling it out, regardless of whether you use paper or electronic means to file. Avoiding these mistakes will save you time and hassles, so it’s a good idea to go in understanding the more common mistakes people make on this form.
First, make sure that you are entirely eligible for this form because there are few things worse than filing the wrong form. You’ll have to fill out an entirely new form if you’ve made the wrong choice and this means that if you waited until too close to the April 15th deadline, your taxes are going to be late getting filed which the IRS won’t appreciate. The IRS also does not do well with misspelled words or incorrect numbers so triple check each line of your return prior to sending it in. While the paper forms are all re-typed once they reach the main office and have their math corrected as a general, when you efile the computer software corrects your math. What the IRS can’t help you do is insert missing numbers such as your spouse’s Social Security number or other crucial data that you forgot to include. Being absolutely certain that all appropriate lines and boxes have been filled in properly goes a long way towards making sure you don’t need to waste extra time amending your 1040EZ tax return.
In actuality you are less likely to have errors and be able to correct them far more quickly if you file via electronic means, but no matter which way you choose if you stay conscientious you should pass through with flying colors.
Maximize Your Refund by Itemizing Deductions on Your 1040 Tax Return
Not every tax form provided by the IRS works for every situation. It is important to consider each of them first before you decide on the correct one for your situation. If you have already chosen the 1040 tax return as your solution for this year’s filing then it is likely you have chosen this form because you have a more complex tax situation involving multiple income streams such as having earned money from rental properties, a farm or maybe even your own business. When you are either self employed or earning more money than the average taxpayer, it is important to make sure that you maximize your deductions in order to avoid paying too much in taxes.
Of course, you will want to be reasonable and not claim more than a reasonable amount of deductions. Getting carried away can trigger the IRS’s suspicion and encourage them to audit you. Also, make sure that you have claimed only genuine deductions that really do fit the categories approved by the federal government and have receipts on hand in case you are questioned about the legitimacy of your deductions.
You will be using Line 40 of your 1040 tax return and a Schedule A, the document that allows you to total up your deductions. There are a wide variety of expenditures you are allowed to itemize, most of them having specific limits that you can deduct. Investors will want to take advantage of the categories for interest and fees paid on investments, such as margin interest or annual brokerage fees. Taxes such as income or sales tax at the state and local levels, including sales tax and property tax, can be deducted. Work related expenses such as union dues, uniform expenses, job education and work related travel costs can be deducted. Health care including both medical and dental expenses along with prescription drugs are covered, too. Contributions made to charities in the form of both cash and physical goods can also be deducted.
There are others items that you can itemize so make sure you take full advantage of the Schedule A with your 1040 tax return to get the most back on your federal refund.
Getting Prepared for Your Efile Tax Return is a Snap
As the federal government begins to get more advanced with the technology they employ, more and more people are turning to a paperless method to file their taxes. This is great news for those of us who are not keen on filling out endless paperwork and more inclined to use a computer whenever we can. It also means that you are not going to have to keep track of physical forms and envelopes that you need to have mailed by a certain date. The efile tax return is a brilliant way to go if you love the convenience of being able to do your taxes any time of night or day.
Getting yourself ready to file is easy and whether you are taking your taxes to a service to have them efiled or you are doing it on your own at the comfort of your own computer, you will need the same items before you can begin. First off you will need the Social Security numbers of everyone who will be listed on the return, including your spouse and any dependants that you are looking to claim. W-2 Forms for both people, if filing jointly, are required. Depending on your financial situation and which form you are using (such as 1040EZ, 1040A, 1040), you may need Form 1099 for Income Tax Withholding or other forms of income including dividends or retirement income. If you will be using a Schedule A with your efile tax return to itemize your deductions then you will want to have that handy, as well.
Finally, be sure that you have receipts and records handy for your income and expenses. Researching this aspect of tax records is very important and will make sure you stay on the right side of the IRS. Last year’s AGI (Adjusted Gross Income) or the PIN you used the last time you filed will also be needed. Don’t forget your bank account numbers if you are looking to get a quick return.