Tax season is underway, so here are four things to think about before you file -- to help you avoid costly mistakes tax experts say too many of us make in filing our taxes.
United Way is committed to ensuring that you can easily and accurately file your taxes and get the refunds and credits you deserve. Using MyFreeTaxes®, you can file state and federal returns for free. Since 2009, United Way has helped some 1.3 million people nationwide save $260 million in filing fees, and bring back more than $2 billion in refunds to local communities through MyFreeTaxes.com. And this year MyFreeTaxes is available in English and Spanish.
In addition to using MyFreeTaxes when filing returns, tax experts offer the following tips to minimize mistakes and to maximize your refund this tax season:
1. Choose Carefully -- One of the most common mistakes taxpayers make is selecting the wrong filing status. That can affect the credits and deductions you’re eligible for, the value of your standard deduction and even your tax bracket. When life gets complicated, taxes get more complicated, too.
For example, if a taxpayer with children is getting divorced, they may not be sure if they should file as “married filing jointly” or “married filing separately” or whether they qualify to file as head of household. MyFreeTaxes can help answer those questions. The tax software behind MyFreeTaxes includes a helpful Filing Status Wizard you can use to confirm you choose the appropriate filing status when preparing your return. You can also use the MyFreeTaxes Helpline to talk to a live specialist trained by the IRS. The MyFreeTaxes Helpline is open from 10 am-6 pm EST daily to clarify things like filing status, and is available at MyFreeTaxes.com/Support.
2. Check Yourself -- Always double-check the basics on your tax returns and make sure your name and the names of your spouse and/or dependents and Social Security numbers (SSNs) or Individual Taxpayer Identification Numbers (ITINs) are right. Make sure to double check information you’ve pulled from your W-2s, if you have any — transposing numbers or entering numbers in the wrong fields are common errors that could cause your return to be rejected.
3. Find What You’ve Got Coming -- Nearly 5 million Americans leave an average of $3,000 each on the table each year by failing to claim common credits and deductions. MyFreeTaxes automatically screens for credit and deduction eligibility for things like the Earned Income Tax Credit (EITC) and the Child Tax Credit and also lets you claim any missed stimulus payments.
Nearly 20% of eligible people don’t claim their EITC each year. Depending on income and number of kids, that could mean leaving $500 to $6,000 on the table.
Many people received monthly Advanced Child Tax Credit payments in 2021. Those payments were only half of the CTC amount people are owed on their 2021 return. Families need to file their 2021 return in 2022 to get the second half of their CTC amount. If you missed your Advanced payments, you can claim the full CTC amount when you file your return. Check it out on MyFreeTaxes.com!
4. School Yourself -- Education credits are another often-overlooked benefit. Depending on the kind of academic program, what year the student is in, income and other restrictions, a student may use the American Opportunity Credit of up to $2,500 or the Lifetime Learning Credit of up to $2,000. And know that MyFreeTaxes software screens for that automatically as it guides you through your returns.
Bottom line: don't leave money on the table, and don't pay for tax prep if you don't have to!