Tax preparation is a tricky business. It is not everyone’s cup of tea; that’s why people have tax accountants to deal with their taxes. But may it be a seasoned accountant or an intern, everyone makes some common mistakes sometimes. The Bloomberg Tax & Accounting researched on the common mistakes made during tax preparations, and here are some of them.
Assuming the wrong date is one of the most common blunders made during tax preparations. The due date is mostly April 15th. However, this year due to the Coronavirus pandemic, the due date has shifted to July 15. In cases when the due date falls on Sunday, Saturday, or a Federal holiday, then one can fill it the next business day.
According to the Los Angeles accountants, many are also confused about which status to fill. Some taxpayers are eligible to claim certain deductions and credits and the amounts of those deductions or credits. That’s why an accountant must be sure of which status of his/her client is most beneficial to him.
One must not forget to claim the Earned Income Tax Credit. This tax credit is allocated to taxpayers who have a fixed salary or income. It is a type of refund for the taxpayer and must be taken seriously.
During tax preparations, the taxpayer must also mention the information about all the eligible dependents. If a baby is born on December 31st of 2020, it is still eligible for tax for the whole year of 2020. Based on the dependents, the taxpayers will get benefits like the head of household filing status, the child tax credit, the credit for dependent care expenses, and the credit for other dependents.
There are many errors during tax preparations. While some may cause a mere recalculation, others many cause an IRS audit. So, one must be careful not to make these mistakes.