CPA Scott Adair from the New York State Society of CPAs discussed some key tax filing mistakes to avoid Monday during News 8 at Sunrise.
Adair said errors on your tax return will ultimately delay your refund if you are expecting one. One of the most common mistakes people make when filing their return is using the incorrect filing status. “You really need to know what you’re filing status is,” said Adair of this mistake. “The most common one is Single versus Head of Household. If you are a single parent who has expenses associated with a child and they are a dependent of yours, consider filing Head of Household versus Single.”
Adair said beyond your W-2 and 1099s, it’s vital you report all other income to the IRS. “It’s really important here because it will come back to bite you later on and so you want to make sure that if you do have income that’s not reported on a 1099 or a W-2 that you claim it in the year that you earned it because the IRS will find out about it and they will come back to ask you questions about it.”
The new tax law has opened the door for mistakes as well, including one many families will want to take advantage of when filing. “We have a new credit, a $500 dependent credit which is eligible for dependent who are 17 years and older,” explained Adair. “We have the Child Care Tax Credit that’s for 17 and under, but this now gives you $500 additional for 17 and older.”
There is also a new credit called the Lifetime Learning Credit. “It gives up you to $2,000 of a tax credit for educational expenses for professional development or graduate courses, which is different from what we’ve had in the past, which is the American Opportunity Tax Credit, which allowed for undergraduate expenses,” Adair said.
Simple math errors or incorrect numbers are enough to send your tax return into a tailspin. “Make sure that all of your addition and subtraction is correct,” noted Adair. “You always have to do that. Make sure that you get the correct names, Social Security numbers are really important, as well as bank routing numbers, as many of us who get refunds or have to pay wind up using a payment through your bank account. Make sure you get those routing numbers and bank account numbers correct.”
For more ‘Smart Money’ advice, visit the New York State Society of CPAs website at nysscpa.org/getmoneysmart.