How To File Your Taxes by Yourself

How To File Your Taxes by YourselfPin

How To File Your Taxes By Yourself & Avoid These 4 Filing Mistakes

Time and again, many taxpayers make the same errors when filing their tax returns. Every error doesn’t mean that your return will be pulled for an audit, but it’s best to make sure you’re as accurate as can be. Knowing how to file your taxes by yourself isn’t hard either.

Making these common mistakes may delay a much needed refund, especially if the IRS mails you a notice and you mail a response back. Besides, some errors may lead to additional review of your return.

Number 1 error – Not reporting all of your income

This one really stands out. As a US taxpayer, all income is taxable, no matter where you earned it, unless the IRS specifically excludes it. In most cases, income earned is reported to each taxpayer and also to the IRS on some sort of information form. Some examples of these are a W-2 and a 1099. The IRS always matches these forms with tax returns, and if they don’t match, a letter is sent to you. So, when you file your own tax return, compare to last year’s return.

The following forms may be sent if they are applicable to your tax situation:

Sometimes, you may receive various forms from payers and you discover an error on one of them. You should contact the payer as soon as possible and notify them of the error and request a corrected copy for you and a copy to the IRS. Otherwise, a delay may result in the processing of your tax return.

There may be situations where you earned some income, such as a side gig, and the amount earned was below the requirement to send a form to you. In that case, you’re required to report the income, no matter if it wasn’t reported.

Number 2 error – Investment gains not reported correctly

When you’re filing your own taxes, and are reporting sales of securities, you have to know what the cost was and what you sold it for to see if the sale was a gain or a loss. The cost basis often has to be adjusted for items like reinvested dividends, commissions, fees, etc. This would change the amount of your taxable gains or would increase the loss.

Brokers and other financial institutions are required to provide the average cost basis to you on a Form 1099-B. Those requirements were set in place years ago and are listed below. Any securities purchased before those dates are your responsibility for determining the cost basis. It’s a good idea to keep all of your purchase and sale records. Knowing how to file taxes on your own isn’t necessary, we’ll guide you.

Based on the type of security purchased, the following dates are when financial institutions were required to maintain cost basis records:

  • Stocks acquired after January 1, 2011
  • Mutual funds & ETF’s acquired after January 1, 2012
  • Most bonds & other instruments after January 1, 2014

Number 3 error – Taking deductions that you have no receipts for

File your own tax returnPinThe past few years, the IRS has been giving a watchful eye for certain tax deductions that taxpayers have been abusing. The most common ones are charitable donations. Many taxpayers were pulling numbers out of the air by saying they gave their church $2,000 in cash during the year.

This has changed. No receipt means no deduction. People who donate clothing and other non-cash type items need a bona fide receipt for items valued over $500 and must list it on IRS Form 8283. If the items exceed $5,000 in total deduction, an appraisal is required. You don’t have to know how to file your taxes by yourself either, our program will guide you.

Be sure also, that the charity you’re making a donation to is an approved IRS listed charity. You can check it on the IRS website under “Exempt Organizations Select Check” tool. Be careful not to use any political individual or organization, they’re not deductible.

Number 4 error – Incorrectly entering information

This common mistake can sometimes be a transposed social security number, and can cause the biggest headache for you. Check these very carefully and avoid delayed processing for your tax return.

  • Check name spelling and all numbers for accuracy
  • Compare the current year with the past year for missing items
  • If you’re mailing your return, be sure it’s signed properly

File your own taxes by using our online tax filing service. When all information is entered, review the finished return for any errors and missing tax information. Knowing how to file your taxes by yourself doesn’t mean you need an accounting degree either. Our simple walk through technology will guide you from start to finish. See for yourself with no obligation.

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