Daily Traders Edge

Taxes 2019: Avoid These Common And Costly Mistakes

February 08
10:21 2019

More than 150 million tax returns are expected to be filed to the Internal Revenue Service this year. It’s likely some may have errors. Don’t let it be you.

Every year, tax professionals usually see the same common errors, with varying consequences.

This year is extra thorny because taxpayers also face a new filing landscape after the tax law introduced major changes. Among them are the increased standard deductions, the doubling of the child tax credit and the capping of state and local tax deduction.

These changes could make it easier to get tripped up. So, it pays read up on the new tax law, take it slow and review your return before filing.

Here are 10 mistakes to avoid:

1. Don’t miss this new credit

Tax pros worry that Americans may miss the new credit for dependents introduced by the tax law. The nonrefundable tax credit is worth up to $500 for each qualifying person and begins to phase out at $200,000 in adjusted gross income ($400,000 for joint filers).

Don’t be surprised: New tax deduction cap could turn big refund into big tax bill

Tools for taxes: Intimidated by taxes? These online tools can help you navigate your federal returns

The dependent must have made less than $4,150 in gross income last year, while you provided more than half of the person’s financial support. A dependent can be a child who is 17 or older, a relative, or a nonrelative who lived with you for the entire year.

2. Not filing a return

Some Americans aren’t required to file a federal tax return because they don’t earn enough in income. Those income thresholds vary depending on status and age. But even if you don’t need to file a tax return because of low income, do it anyway, says Kathy Pickering, executive director of H&R Block’s Tax Institute.

“You may be eligible to claim a refundable credit or you may have a refund owed to you,” Pickering says. “There’s roughly $1 billion in unclaimed refunds from people not filing a return.”

If you lost your job and claimed unemployment benefits, you also need to file a return, she says. That’s because some people don’t request for taxes to be withheld from their unemployment checks and end up owing the government. “That can get people in trouble,” she says.

Continue Reading at USA Today

Related Articles

Newsletter Signup

Sign up for our free newsletter