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Common Tax Mistakes to Avoid

Every year, taxpayers make costly mistakes when filing their taxes, whether they hire a "professional", file online or attempt to do it themselves.
The 2014 tax season officially begins in less than two weeks. Typically, the IRS would have begun processing returns on yesterday, but due to last year's 16-day government shutdown, the season is delayed to start until January 31st.

But tax agencies say the IRS being behind is no reason for taxpayers to hesitate to file their return now. Agencies like H&R Block and Abilene Bookkeeping are already taking appointments with customers wanting to beat the crowd. This year, more Americans are expected to get a tax return, instead of owe the IRS money. But that return can be jeopardized if often-made mistakes are not avoided.

"They can miss a lot of credits if they're filing online," says Suzi Hopkins, who is a master tax adviser at H&R Block.

She says most mistakes are made when people choose not to hire a professional and instead, turn to online services or attempt to do their taxes on their own.

"They may answer a question incorrectly that could cut them out of a credit or deduction," Hopkins says.

But whether you file online or through a professional, mistakes can be made. Tax errors can be as simple as leaving out or putting an extra digit in your social security number or addition and subtraction errors. One mistake Hopkins says many people make is either improperly claiming dependents or failing to claim a dependent(s).

"Sometimes they claim dependents that they really cannot claim. Your neighbor may say 'you can claim my child because I have enough', but you cannot." Hopkins says, "there are certain qualifications for a child to be on your return."

It's important when preparing to file taxes, that people note all important purchases, like buying a new house, and life-changing situations, like getting married. These events can lead to additional deductions, credits or cause for more information.

"Sometimes they do not get the filing status correct. If they are married at the end of the year, whether they lived together or not, they have to file 'married filing jointly' or 'married filing seperately'."

Hopkins says the biggest mistake anyone could make is to decide to not file at all. If you fail to do so, come the summer, the IRS will send out a letter warning you of the consequences to come.

"If you're under the filing requirement, you don't have to file depending on how much you made, and some younger individuals don't have to, but get advice on whether you have to file or not."

And Hopkins advises not to procrastinate in taking care of your taxes. She notes, the sooner a tax return is filed, the quicker a refund is issued. According to the IRS, it typically takes about 21 days for a return to be processed. But if you wait to file your taxes towards the April 15th deadline, that waiting period could become much longer.

If you're unsure if you are required to file or if you have any other questions regarding the filing process, experts say the best resource to use is the IRS website, http://www.irs.gov/. You can find details on the different tax credits, limitations and deductions.


*For tax preparation in Abilene, Suzi Hopkins is a Master Tax Advisor at the H&R Block location in the Woodhaven Shopping Center.

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