As you may have noticed, I'm posting a lot on taxes lately. It's a huge expense for most people and as I see April 15 coming, I just can't help but post on it.
Over the next seven days, I will be sharing this piece from Money Central that details the top taxpayer mistakes. Here we go:
Bad math
According to the Internal Revenue Service, errors in addition and subtraction are the No. 1 mistake taxpayers make. All returns are examined for mathematical errors. Mistakes in arithmetic or in transferring figures from one schedule to another result in an immediate correction notice. If the error leads to a tax deficiency, you automatically receive a bill for that amount. If you overpaid, the excess is applied to future taxes, credited or refunded at your request. You can’t appeal such corrections, but you can ask in writing that they be reviewed if you think the IRS made a mistake.
Check the figures on the IRS correction notice. They have been known to make mistakes. Arithmetic mistakes alone rarely lead to a full audit.
This is one reason I use an accountant to do my taxes (other than saving me time and effort). They use a computer program that eliminates this issue.
Click here to read part 2 of this series.
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