5 common mistakes in early filing a tax return - ForumDaily
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5 common mistakes with an early tax return

The 2019 tax season began on January 28 and the IRS is ready to accept 2018 tax returns electronically or on paper. Here are some good reasons to file your returns before April and the five most common mistakes to avoid when doing so.

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Why submit tax returns earlier? Fox Business puts it another way: why leave the tax burden on your shoulders until April and then spend a crazy week trying to do everything at once? Plus, filing early can thwart scammers trying to file a false return in your name—and if you're due a tax refund, why not get it as soon as possible?

Despite all of the above, be careful not to undercut the benefits of an early tax refund by learning about five pitfalls that can easily fall into when filing your returns early.

1. You did not submit the required form.

Tax forms are not always simple, and it is not always obvious which ones you need to get before you submit.

Taxpayers with multiple sources of income need a W-2 or 1099 form covering each source from which you received at least $600 during the year. If the IRS receives a copy without your representation, it will, at best, result in a delay in processing the documents; at worst, it could result in fines and even an audit. Also, remember that even if you didn't receive a 1099 form directly from your source of income, you must still report that income.

Typically, W-2, 1098, and 1099 forms employees and self-employed contractors must receive by January 31, although some 1099 forms last until February February 15, and even longer for K-1. Examine all the forms that can be applied in your case and make sure you get everything you need before you apply.

Do not forget about incoming and outgoing forms, especially if you are classifying income. Many loans and deductions require the provision of a separate form to show evidence of eligibility and calculate the necessary amounts.

2. You ignored the requirements of “health form” 1095

If during the 2018 tax year you purchased health insurance on the stock exchange, do not be deceived by the published changes in the recent Law on the Reduction of Taxes and 2017 Jobs of the Year. You will still receive an 1095 form, where you need to provide proof of medical insurance coverage for the 2018 year. An individual mandate requiring medical insurance coverage was excluded from the new legislation, but the changes will take effect only for the 2019 tax year (documents for which will be submitted already in 2020 year).

In 2017, the IRS announced that refunds would be declined unless the taxpayer confirms the health insurance coverage in tax form. Coverage in the form will have to specify.

3. You have not rechecked information

Have you signed your form? All exactly counted? Have you downloaded the correct annual forms and instructions? In fact, when you are in a hurry, it is very easy to forget about the simplest things. Before sending, review your form and, if possible, take a few minutes for an additional quiet check before sending a request. It is difficult to check something qualitatively immediately upon completion.

4. You incorrectly filed a corrected form.

Suppose you found a mathematical error in your form, or you realized that you forgot to add an 1099 form, after an early registration. Should you correct the errors immediately and submit the form immediately? Not at all. The IRS will correct your math errors and inform you of any missing forms.

However, you must file an amended return for changes in filing status, changes in income, or deductions/changes in credit. Don't start over with a new Form 1040—use Form 1040X, reporting only the relevant changes. Amended returns must be filed in paper form only—electronic filing is not permitted.

5. You did not consider 2019 of the year on 2018 taxes.

Several transactions that may occur in 2019 may affect your 2018 tax returns. For example, let's say you have a tax filing deadline of April 15, 2019. Before this date, you can still make an individual pension contribution and count it in 2018 - provided that you correctly determined that this contribution belonged to the previous year. If you have already filed your 2018 tax forms, you will need to amend your return and resubmit it to add contributions that affect the previous reporting period.

What else do you need to know?

There are many good reasons to file tax returns earlier, but don’t sacrifice accuracy for speed. Make sure you have all the necessary forms and that all transactions that will affect the tax year 2018 have already been completed. Please read the tax form carefully before signing it and sending it to the IRS.

Nobody wants to spend a lot of time on taxes, but think of it as an investment. Double-check all documents, and then you are more likely to avoid submitting a revised declaration and possible IRS verification.

Remember that the failure to pay taxes, penalties and fines that you owe to the state can adversely affect your credit rating.

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