Daily Dupaco

Tuesday, January 31, 2012

Tax-filing missteps that could cost you

With mailboxes filling up with tax-related documents, we turned to a local professional for help navigating the latest tax season.

Cynthia Schlichting, a partner at Riverview Tax & Accounting in Dubuque, argues that one of the best investments taxpayers can make is to hire a professional to file their tax returns.

"In the long run, a tax professional is going to save you more money than if you try to do it yourself," she says. "Otherwise, you end up paying more in than you should and you don't even know it."
Here are three common tax filing mistakes - and tips on how to avoid them:

  1. Many taxpayers who qualify for the education credit miss out on the savings because they don't understand how to compute it. "They can try to read up on it, but the best thing to do is go to a professional and tell them you have somebody in your family in college," she says.
  2. Homeowners often overlook the energy credit. They either miss out on the credit when filing their own tax return or go to a tax professional who doesn't ask whether they made any major energy-related improvements. "These are two of the biggest credits that are out there ... that a lot of people qualify for and don't give to themselves," Schlichting says.
  3. Taxpayers submit wrong names on their tax forms, or transpose social security numbers or birthdates. Pay attention to whether someone in your family has a hyphenated name or a different last name. "You have to make sure everything you put on that tax return matches the IRS files," Schlichting says. "They have what's on your social security card."

By Emily Kittle

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