Top Ten Tax Mistakes to Avoid, Part 1

Mistakes 10-6

Mistake #10: Filing Late
“I forgot” is not a valid excuse. Taxes are due April 15th.

Instead of not filing a return, file a “Form 4868, Application for Automatic Extension for Time to File U.S. Individual Income Tax Return.” This must be filed by April 17th and gives you until October 17th to file your return.

Mistake #9: Not Filing At All

This is called tax evasion. It leads to stiff penalties and even jail time.

Some notable tax evaders in the past include:

– Martha Stewart: Forced to pay $220,000 in back taxes, served 6 months in prison
– Wesley Snipes: Charged with $17 in back taxes, sentenced to 3 years in prison,
– Willie Nelson: Forced to pay $16.7 million in back taxes

MISTAKE #8: Failing to Report Additional Income

Did you work a side job this year? If so, you should have received a Form 1099-MISC for those extra earnings.

What about savings and investment accounts? You should have received a Form 1099-INT and Form 1099-DIV.

The IRS knows how much extra you made in extra wages or investment income, so don’t leave these off your return!

MISTAKE #7 Tax Returns Missing A Social Security Number

A missing or incorrect social security number is one of the most common IRS tax return errors.

Including your social security number is also crucial to claiming several tax credits, including educational expenses and dependent care costs.

MISTAKE #6 Failing To Keep Copies of Your Old Returns

Keep copies of your old returns just in case.

Tip: Print them out and put them in a folder.

We’ll reveal the top 5 mistakes made when filing taxes tomorrow. In the meantime, click here to learn how to start taking back your wealth from the greedy hands of the government.

The Daily Reckoning