With Tax Day around the corner, it’s a good time to highlight the costliest mistakes tax experts say we make in filing our taxes.
United Way of Denton County is committed to ensuring that people in Denton County can easily and accurately file their taxes to receive the refunds and credits they deserve. Using our VITA - Volunteer Income Tax Assistance program or MyFreeTaxes®, you can file federal returns for FREE (for those who earn up to $60,000/year or $73,000/year respectively).
In addition to using VITA or MyFreeTaxes when filing returns, tax experts offer the following tips to minimize mistakes and to maximize your refund this tax season.
1. Choose Carefully
One of the most common mistakes taxpayers make is selecting the wrong filing status. That can affect the credits and deductions you’re eligible for, the value of your standard deduction, and even your tax bracket. When life gets complicated, taxes get more complicated, too.
For example, if a taxpayer with children is getting divorced, they may not be sure if they should file as “married filing jointly” or “married filing separately” or whether they qualify to file as head of household. Our IRS-trained volunteers can help answer those questions. Or you can use the MyFreeTaxes Helpline to talk to a real person trained by the IRS. MyFreeTaxes’ Helpline is open from 10 am-10 pm EST daily to clarify things like filing status. Just call 1-866-698-9435.
2. Check Yourself
Always double-check the basics on your tax returns and make sure your name and the names of your spouse and/or dependents and Social Security numbers are right. Make sure to double check information you’ve pulled from your W-2 — transposing numbers or entering numbers in the wrong fields are common errors.
3. Find What You’ve Got Coming
Nearly 5 million Americans leave an average of $3,000 each on the table each year by failing to claim common deductions and exemptions. Our VITA volunteers and MyFreeTaxes automatically screen for credit and deduction eligibility for things like the Earned Income Tax Credit (EITC) and the Child Tax Credit and also lets you claim any missed stimulus payments.
Nearly 20% of eligible people don’t claim the EITC. Depending on income and number of kids, that could mean leaving $500 to $6,000 on the table. You may think you can’t get the EITC if you don’t earn enough money to file a return. Wrong. The EITC is a refundable credit, so even if you don’t owe taxes, you can still get the EITC.
4. School Yourself
Education credits are another often-overlooked benefit. Depending on the kind of academic program, what year the student is in, income and other restrictions, a student may use the American Opportunity Credit of up to $2,500 or the Lifetime Learning Credit of up to $2,000. And know that our VITA volunteers and the MyFreeTaxes software screen for that automatically as we guide you through your returns.