CHICAGO, April 7, 2011 /PRNewswire-USNewswire/ -- Maybe you're just a procrastinator by nature or it's been a rough year with too many life issues getting in the way of doing your tax season homework. So now, even with three extra days this year, you haven't filed your taxes yet, and the April 18 deadline is fast approaching.
Because you're in a last minute rush, it's even more important to take the time to check and double-check your work. According to the Illinois CPA Society, you should watch these five areas for errors that could cause you problems later:
1. The Name Game. Of course you know your name, but does it match your Social Security Number? Your return could bounce back, or your refund can be delayed, if they don't match. For women there can be confusion on the use of married and maiden names, or how they add or hyphenate names. Don't forget the hyphen if you use one and also be sure names are shown correctly for dependents.
2. Corrected 1099s. If you've already filed your return or are just about ready to, you may need to amend or restate your return should you receive a corrected 1099 restating the amount paid to you.
3. Do you know everything you need to know? Like where your money is invested? If your broker has put your money in a PTP (Publicly Traded Partnership), a K-1 form is generated. The form shows your reportable income and expense items which you need to claim on your tax return. You may not be expecting this form or may not get it in time, so check out if one is due to you; you many need to file an extension if you don't get it on time.
Also, be sure you received all corrected 1099 forms from brokerage houses since many have issued corrections.
4. Records & Receipts. Be ready to prove any charitable donations you're taking as deductions with records, receipts, credit card statements, and even an appraisal of a donated item. The IRS is coming down on overvalued non-cash contributions, so describe the condition of donated items and be conservative in valuing them.
Gamblers also need to do their bookkeeping and be prepared to back up wins and losses. Most legitimate gaming facilities will issue you a form W-2G if you win $600 or more, and you must adequately document the amount of your losses if you want to claim them as a deduction. Bottom line is, if you're claiming any type of deduction, back-up your claims.
5. Overlooked deductions. Size up your situation to be sure you haven't missed any major deductions. You could be shortchanging yourself. Was your salary greatly reduced in 2010? You may now be eligible for the Earned Income Credit (EITC). You can also deduct certain costs of a job search, moving expenses for a job, and medical and dental expenses. If you have children, check out the child and dependent care credit and deductions available for students. Get more details on deductions on the IRS site- www.irs.gov.
There's one more area Illinois residents need to watch on their state tax returns - online shopping. They need to show internet purchases where no sales tax was paid. There is a Use Tax Table based on income level. It may generate a higher number than the tax on actual purchases so you may want to check credit card statements and email confirmations for a list of your 2010 untaxed online purchases. Read more on the Use Tax and find out about Use Tax Amnesty at the Illinois Department of Revenue site - www.tax.illinois.gov.
Both the IRS site and the Illinois CPA Society site - www.icpas.org - provide more information on tax issues. If the tax preparation task seems overwhelming, or you don't feel you're ready to file, keep in mind you can file for an extension. Use form 4868 for a six-month extension, but you'll still need to estimate what you owe and pay any taxes due by the April 18th deadline.
About the Illinois CPA Society
The Illinois CPA Society, founded in 1903, is the fourth largest state CPA Society in the nation, with more than 24,000 members. It is the premier professional organization that represents CPAs in Illinois. During its over 100 years of existence, the Society has advanced the highest ethical and financial standards of the profession, and has been a leader in educating the public on financial issues.
SOURCE Illinois CPA Society