For those of us who would rather save those precious dollars in payment and redirect them to pay for the tax itself, the chances of incurring errors and complications significantly rises.
We would not want the IRS to come knocking at our doorstep for an audit.
Being audited is very burdensome as it requires a lot of explaining and proving.
Here are the top three income tax preparation errors which occur during tax filing.
1) Mathematical errors.
Computational errors occur during totaling of returns, salaries, exemptions, deductions, and summations of both cash in and outflow.
Tax agencies are ever vigilant in checking the figures and numbers declared in your income tax preparations as these should always be accounted properly and balance out.
Even a single dollar may arouse suspicion of even more computational blunders of a higher amount.
It would be wise to use a computer or a calculator and recomputed the figures three or fivefold to lessen chances of miscalculations.
2) Incorrect tax equivalent considered based on the individuals tax category and gross taxable income.
Since taxes are based on the taxable income of an individual, a wrongly assessed gross salary may result to a wrong taxation declaration and payment.
The income tax preparation of individuals differs among single and married taxpayers.
It is wise to consult your local tax office for your profiling and tax bracketing or you may visit your local taxation offices' Website for more information.
3) Wrong entry field.
As you fill up the seemingly endless boxes and fields in income tax preparations, there is a big chance that human error and lapses occur, resulting to incorrect field entries, and eventually a call from the taxation office.
Just like computing for the correct figures, make sure that the correct values are written and placed in the right field.
These simple tips hopefully serve as awareness for avoidance of explaining with the local authorities left and right, and avoided being audited for suspicion of fraud, tax evasion, or simply just being careless.