Top 7 Tax Mistakes: Information Can Go A Long Way

As I do everyday, I was on CNN Money when I found myself on an article that showed and explained the top 7 mistakes that citizens make on their tax returns every year. To look at the original article, please click here. Let's take a look at the seven mistakes and how to prepare to not make one when you are ready to sit down and do you own taxes this year.

No Signature

This is one of the mistakes that many people would look at and say, "I would never." Well people, never say never, because everyone is subject to forgetting to sign something at one point or another. It just happens that many people's time is during tax season! I conclude for myself that I may be so worried about the more complicated areas of my taxes that I just don't worry about it or pass it and assume later that it has already been done.

How to fix: Before you push a pen onto your tax return get a sticky note or colored tape and mark all the places that if not filled out will result in an audit (we sure love to be audited!). That way when you are finishing up your return, you will have to remove the sticky note any way and remember that maybe that area needs a second looker.

Wrong Social Security Number

I must say that if one is at the age where they are filing a tax return that maybe they should have their SSN already memorized, however I do realize that husbands, children, etc also come into play during this time. 

How to fix: Remember those Pokemon or baseball card holders? Well who knew they work very well with holding important smaller documents like social security cards! Just slide all of those into one of the folders and then put it into the area where you keep all your important documents (binder, file, etc). Come tax season pull out you will be able to look at all of the cards at once and keep them organized.

Wrong name

This another area where one was probably just a little absent minded while filing. It can also be a little difficult if you or a member of your family goes by a different name than what is on their social security card.

How to fix: This can be fixed as easily as double checking or making sure that the names match those on your social security cards. Don't rush or those simple little mistakes will go overlooked.

Wrong Filing Status
This is a quite understandable mistake if your status has changed since you previously filed your taxes. Common reasons for your status changing is: marriage, divorce, death, etc.

How to fix: Understand what would cause for you to change your status and be aware if any of these events happen to you. For information about what each status's qualifications are click here.

Mistakes Claiming Credits and Deductions
Deductions may be one of the most "fun" parts of filling out your taxes right behind receiving your tax return. Credits and deductions are grant such as the Child and Dependent Care Credit and the Education Credits.

How to fix: Make sure you have a list of all the credits that take place and see if you qualify for them. If you are unsure if you qualify for a certain tax credit please take a look at this link or access your state website to see where there can be further assistance for your questions.

Wrong Bank Account Number
I will be quite honest that I am not even 100% sure of my own bank account numbers. This is a very important step to having your tax refund being deposited into your account. This is a big reason for filing your taxes correct?

How to fix: If you are unsure of what your bank account number is that you would like to have refund or tax expense to come from or go into then look at your previous bank statement.

Math Errors
Everyone isn't amazing at math. Even the smartest mathmaticians probably have been caught messing up simple calculations every once in a while.

How to fix: Having a calculator if you are filing your taxes by hand is probably a must. Modern times is making it even easier to file electronically and even doing all your addition and subtraction for you! Just make sure in the end to double check every entry.

Money Knowledge You Wish You Knew In College

1. Make Your Own Food Think about how much that coffee mocha latte from Starbucks costs you. Now think about how much brewing your own cup coffee with cost you. Want to know the numbers? 4.50 vs 37 cents!!! If you buy your own groceries and make your own food, you WILL save money than going out.

2. Buy grocery basics at the cheapest place where you can also use those coupons or rebates
This way you can save on what you buy all the time

3. Buy expensive periodically than cheap oftenIf you make a plan and save for a more expensive item, then you know that you have thought through the purchase and am not splurging all the time

4. Apply for a credit Card for one reason and one reason only, to build creditWhen you apply for a credit card make sure to research which card you would like. I would recommend getting the Discover it card because it works really well with students and you earn cash back with every purchase!

5. Pay off any outstanding bills before they start dragging your credit down. I have heard horror stories about a decades-old $36 hospital bill dragging a credit score down 100 points.

6. Observe the 50/30/20 budget (after taxes). This handy ratio was dreamed up by Elizabeth Warren, a Harvard bankruptcy professor and the author of All Your Worth: The Ultimate Lifetime Money Plan. Immediate living expenses (rent, utilities, automobills) take up 50 percent of your earnings. Wants (vacations, clothes) take up 30 percent. The Future (savings) takes up 20 percent. Helpful guideline, even if your individual budget is slightly tweaked to meet your specific needs.

7. Having very little savings during your first post-college years is normal. In fact, you will look back on the days of trying to make a decent dinner of frozen vegetables and one egg rather fondly, if you can believe it.

8. But having savings in your later 20s will make you feel so much safer and give you an opportunity for a nicer lifestyle. Even if it seems implausible right now, having a small fraction of each paycheck automatically transferred into a savings account is really effective over time. We're talking like $50 bucks, if that's all you can manage.

9. Don't be resentful of friends with wealthy parents who can rely on their financial support. It may be frustrating to see them be so cavalier about money that haven't even earned while you're obsessing over ways to save and barely getting by, but they undoubtedly have their own insecurities about being supported by their parents. And it feels so much better to be independent, even if you have to skip a few restaurant dinners to do it.

10. Don't rely on a significant other financially. It makes sense to adjust rent to scale if you live together (e.g., if you're making $30,000 a year and he's making $60,000, it's reasonable to want him to pay slightly more), but winding up totally fiscally dependent, like day-to-day, on the person you have sex with is a bad idea.

11. Don't be afraid to upgrade your lifestyle according to your financial capabilities. Say you get a new job where you're making twice as much money as you were. It's OK to want to move to a nicer place, or eat out more, or treat yourself. It feels weird at first if you're not used to it, but TREAT YO'SELF.

12. Taxes! TAXES! They're so horrible. In some cities you take home like half of your paycheck. I'm serious. Don't forget to factor taxes into every decision you make. Just pretend your official salary doesn't matter, and add up your actual real world paychecks monthly to get your post-tax salary.

13. If you're salaried, enrolling in a 401(k) will help with your taxes a little bit. Because the taxes are done after the deduction, which will make them slightly less.

14. It's not tacky or annoying of you to ask a new boss about the company's expense policy. That's what they're there for. Just remember how much money the company has!

15. Never carry over debt from month to month. If you're not going to be able to afford it that month, don't buy it. Exceptions for things like cars and houses, obviously.

16. Set up automatic payments on your student loans. If you miss a payment on those things they charge you like crazy.

17. Never ever get store credit cards. I had a Nordstrom card once. It almost ruined my life. The interest is really high, and they rope you in with a slight discount the first time, but then you are HOOKED.

18. If you have a bank or a credit card with an app, download it. It will help when you forget until the last minute to pay that credit card bill.