Note to self: tax mistakes to avoid next year | MoneyStrands

Every year, you make the same promise to yourself: I’m going to plan ahead, finish my taxes way ahead of schedule and get a huge return! But then you find yourself in a last-minute scramble, and all the good intentions end up just like that – intentions.

So now that you’ve got a whole new year before next Spring, sit down, grab your favorite beverage and figure out how you’re going to make 2017 the year of your biggest return.

  1. Blowing the basicsIs your name and surname spelled correctly? Is your Social Security number correct? Here’s the thing: typos happen. You’d be surprised at how many people write Taylon instead of Taylor, or Alien instead of Aline. But bad news is that typos can cost you a lot of money when doing your taxes. No matter how attentive you are, you need to proofread twice or one of those suckers will slip through.
  2. Not getting your receipts togetherKeeping track of your receipts all year long will help more than just during tax reason. It will create the habit of good organization and may improve your decisions about money.If you don’t yet use a good personal finance management app – now’s the time to find one. Make sure you pick one with a customizable tagging tool where you can individually personalize each item you want to categorize as, for example, “deductible expenses”. Easy as pie.
  3. Not choosing the correct filing statusAccording to the IRS, filing status errors are one of the most common mistakes that taxpayers make. It’s a minor detail, but it can have big consequences if your tax bill is higher or lower than it’s supposed to be. Don’t know which category you fall into? Use the Interactive Tax Assistant on the IRS website or consult a tax preparer.
  4. Spending tax refundsHave you already decided how you’re going to spend your refund before having received it? You’re not the only one. And most often it’s on a depreciating asset like a car, clothes, gadgets… This probably isn’t what you want to hear, but there are other financially constructive uses for this money. Tackling debt, investing, or making truly necessary purchases are some of them. See 8 smart things to do with your tax refund.You might be the kind of person who works well under pressure. Me too. But by procrastinating, we’re all more likely to make all-too-common errors and break our budgets.

    What tax mistakes have you made before and what would you do differently? Tell us about – we’d love to help!