Tax Mistakes to Avoid

It’s tax season. Tax season can cause us to feel anxiety, stress, confusion, and/or procrastination. These can lead to mistakes on your tax return, which can lead to late filings and even some penalties. Red Crown wants to help you avoid all of this with some basic tips. When researching common tax mistakes, we found the following:

Incorrect Status

Selecting your status is a big part of determining how your taxes are calculated. Deciding your status can be easy if you are single with no children, but for people who are married, single parents, or even caretakers, it can sometimes be difficult.

If you need help figuring out what your status is, go to https://www.irs.gov/help/ita.

Social Security Number

Who would have thought that one of the most common mistakes in filing your taxes is putting the wrong Social Security Number (SSN)? The Internal Revenue Service (IRS) uses your SSN on your taxes to match what your employer and financial institutions have paid you. Putting in the wrong SSN happens more when you’re writing or typing your spouse’s and dependent’s numbers. Simple Tip: double check- then triple check to ensure that your information is correct.

Math

According to Block Advisors, there are about 2 million math mistakes made on taxes. The mistakes range from simple addition to complex calculations. These math errors can happen when people are doing their taxes by hand. Why go through all of that when you can use a free tax filing software at https://apps.irs.gove/app/freeFile/.

Incorrect Bank Numbers

If you get a refund, you have the option for your money to be refunded by direct deposit – it’s the fastest way to receive your money! By choosing direct deposit, your refund will go right into your bank account. To go this route, you will need the financial institution’s routing number and your account number. Again, to avoid this mistake and possible delays on receiving your money, double-check your numbers.

Unsigned Tax Return

You made it to the end and everything is correct! Make sure you don’t forget to sign your tax return. If you submit an unsigned return, the IRS considers it invalid and your return will not be processed. Also, don’t forget that both spouses must sign a joint return.

Missing the Deadline

Make sure you file on time! The normal deadline to file is April 15th of each year. Start early, get it done and filed to avoid penalties.

Conclusion

Taxes season is no fun, but if you take the time to understand your tax situation you can get it done and avoid costly, frustrating mistakes. There are many helpful tools on the internet, such as: https://www.irs.gov/. If you are member of Red Crown, you can use TurboTax online at a discounted price. Click here for more information.

*Red Crown Credit Union is not a financial planner or advisor, and this blog gives general ideas on how to save money. Individual results may vary.

 

 

 

5 Ways to Save Money

Can we all agree that 2020 has kept us on our toes? Some days feel like time is going so slow and other times it is flying by! Before we know it, the holidays will be here.

Red Crown wants to help you find ways to save during these crazy times. Below are a few examples of ways to help you save money:

Spend a Little Less on Yourself 

According to CNBC, online shopping has gone up 31.8% since the pandemic. Along with online shopping, companies have started to re-open and we are getting back to normal, which means even more shopping.

One great way to save money is to cut back on things you want and do not need. Cutting back on small items can add up dramatically. We all know the Starbucks analog; if you spend $4.43 per drink at Starbucks and you indulge every workday, you will have spent $22.15 in one week on coffee. Cut your trips in half and you will save $11.07 each week. That is $44.30 in just a month!

Look at how much you are spending on random online shopping, going out to eat, Door Dash, and more. You may be shocked. Say no to the some of those “wants” and watch your savings grow.

Stick to Your Shopping List

How many times have you veered off your grocery list or just went from memory? People who do not stick to their grocery list or shop from memory tend to spend more money. Grabbing random items can add up quickly. People who make a list and stick to it end up spending less.

Bring Cash

Go back to when you were a kid and had no debit card or credit card. Do not use any plastic while shopping. Using cash will force you to spend only what you have in your wallet.

Finance Apps

Finance apps can help you make a budget that works for your lifestyle. Within these apps, you can create categories for your paycheck distributions. The program will advise you on what percentage of your check should go into each category. These apps help you to take control on how you budget your money each month.

Using one of these apps can be very useful in knowing how to save, when to save, and how much to save.

Look for Deals

Deals happen all year around. You can find deals when purchasing food, gifts, clothes, and more. Look for sales, coupons, and plan ahead.

Conclusion

These five tips may seem easy, but breaking habits can be a hard thing to do. You do not have to try all of them at once. Using one from this list is a great way to start. When you get comfortable with one, add another. Just start.

 

*Red Crown Credit Union is not a financial planner or advisor, and this blog gives general ideas on how to save money. Individual results may vary.