If you haven’t already filed your 2022 taxes, now is the time to do so as the deadline is fast approaching. Earners have until Tuesday, April 18 to file both federal and state taxes.
As you are preparing your taxes, the Illinois CPA Society is warning of the most common tax-filing mistakes to avoid.
One of the biggest mistakes taxpayers can make is in the personal information section. A misspelled name, incorrect Social Security/tax ID number, or forgetting to update a changed direct deposit account can result in delayed acceptance of your return or the IRS rejecting it entirely. This would result in a delayed tax return if you were owed money or a monthly penalty added to your tax bill plus any incurred interest.
Additional areas to pay attention to are your income and the credits and deductions sections. If your income does not match what the government has on file, at best the government will request more information from you and at worst you will be fined. Most earned income will generate a form for you to use to prepare your tax returns, however you are responsible for reporting some forms of taxable income on your taxes. Meanwhile, it is often challenging to keep the requirements for credits and deductions straight, so be sure to check through each option closely and provide proof when necessary.
One last easily confused area of taxes is investments. Financial institutions are required to provide this information on a regulated form, however, much like personal income there are some investments that are self-reported. Not only should you be careful of underreporting your investments to avoid penalties, but you also need to be aware of which transactions have already been reported so that you are not overreporting on yourself.