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Common Tax Blunders Here’s a list of common mistakes that taxpayers make when preparing their tax returns: Incorrectly entering social security number: It seems simple, but many filers forget or transpose a number. After filling in your SSN, TurboTaxâ includes a separate review screen for you to confirm your SSN before proceeding with your return. Mathematical errors: Calculation errors are very common, even when people use a calculator. Again, numbers can be dropped or transposed, or rounded up or down incorrectly or entered on the wrong line. TurboTax does the calculations for you, so your return is accurate. The Progress Summary shows total taxes owed as you go. Not claiming all of the deductions you are legally entitled to: Many taxpayers aren’t aware that they can deduct vehicle registration fees, for example. TurboTax’s Deduction Finder, which is part of the Final Review at the end of the EasyStepâ Interview, ensures that there are no overlooked deductions. Failing to enter all necessary information: Many taxpayers who complete returns manually often forget to enter all necessary data. TurboTax scans your return for missing information (like an ex-spouse’s social security number that you forgot to include when you entered your alimony payment deduction) and prompts you to complete all necessary fields. Home Office Deduction: Many taxpayers continue to be confused about whether or not they can take a home office deduction. TurboTax eliminates the confusion by offering clear, concise Q&A and walks you through this process. Does the alternative minimum tax (AMT) apply?: Most taxpayers don’t know if the AMT applies to them. TurboTax automatically notifies you if AMT applies, based on the information you enter into your tax return. It then adds the amount of AMT due to your regular taxes to ensure you pay the correct amount. Forgetting year-to-year carryover items: Items such as state and local taxes paid for the prior year in the current year can get lost in the shuffle. With TurboTax, you can automatically import that information from your personal financial software. Or TurboTax will prompt you at that phase of the Interview if you are missing information. Unfamiliarity with tax terms/laws cause filers to complete wrong forms (or complete the right form incorrectly): Taxes can be very complex and changing tax laws don’t make it any easier. New forms are introduced or revised by the government and taxpayers need to be aware of these changes in order to complete their return. For example, have you filled out Schedule B lately? Did you know that you must put your ordinary dividends and your capital gain dividends in two entirely different places? In fact, you report your capital gain dividends on a completely different form! TurboTax asks you questions in simple language, calculates everything and fills out the forms for you.
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