Mistake No. 1: Leaving off Attachments
Make sure you've complete and attach all required schedules and forms to your Form 1040. Attach these forms using the "Attachment Sequence Number" ; the number is found in the upper right hand corner of each schedule or form. Attach other statements or schedules at the end of your return, even if they relate to another form or schedule. Additionally, it's a good idea to include your name and Social Security number on every page you submit.
Mistake No. 2: Forgetting About Carry-Forwards from Prior Years
Make sure to check prior year returns to see if there are any items that need to carry over for this year, such as capital losses or charitable deductions that exceeded the amount you were able to deduct in previous years.
Mistake No. 3: Reporting Investments Income in the Wrong Place
Some taxpayers mistakenly report earnings from money market funds as "interest income" when, in fact, the IRS considers such earnings to be dividends.
Mistake No. 4: Overpaying Social Security Taxes
If you worked more than two jobs and your total earnings exceed $118,500, you may have overpaid your Social Security Taxes. The instructions that come with your Form 1040 will tell you how to claim a credit.
Mistake No. 5: Unnecessarily Declaring Your State Tax Refund as Income
Many people mistakenly report state tax refunds as income. If you took the standard deduction instead of itemizing in 2004, you don"t have to show your state tax refund as income for 2005.
Mistake No. 6: Failing to Document Charitable Donations
If you have made a charitable donation of $250 or more, you will need to get a written acknowledgement from the charity. A canceled check is not acceptable. If you donated property instead of cash, you will need a written description of the property. When your non-cash contribution exceeds $500, you also are required to file IRS form 8283; Non-cash Charitable Contributions, which will give the details of the donations.
Mistake No. 7: Omitting Social Security Numbers of Dependents
You must include the Social Security numbers for all of your dependents on your tax return. Also, you must complete Form 2441 to claim a child or dependent care credit. Indicate the caregiver's name, address and taxpayer identification or Social Security number.
Mistake No. 8: Math Miscalculations
Review your return to make sure that your math is correct. If you find mistakes, remember to recalculate other figures that are affected by the error.
