Friday, March 4, 2016

MISTAKE #5: Making Stuff Up

Top Tax Return Mistakes Made By Self Preparers


© Lane Erickson | Dreamstime.com


I don’t know the cause of this phenomenon, but a lot of people seem to get frustrated with tax software and start making stuff up to put in their tax return.

Maybe it’s because the deadline is approaching and they don’t have time to collect all of their tax documents. Or maybe the tax bill seems too high. Or maybe the software has an error message they need to get around. Or maybe it’s asking questions they don’t understand. In any case, people are prone to just make things up when preparing their own taxes.

The problem with making stuff up and putting it in your tax return (aside from the obvious problem of being illegal), is that the IRS has a sophisticated computer system that can generally figure out when you’ve fallen outside of “normal” parameters. That’s when you get audited.

Audits usually happen two years after you file the tax return. After two years, you’ve calmed down a bit from that day when you filed the original return. It’s then that you’ll be forced to look at what you filed and ask, “What was I thinking? Where did this number come from?”

So keep good records and don’t put your tax return off to the last minute. If it turns out to be too stressful for you to self-prepare, there’s no harm in hiring a tax professional. It’s important not to guess or make things up when preparing your tax return.


Read about Mistake #4.

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