We’ll pay you back up to $20/month in ATM charges if you use an out-of-network ATM to access your checking account.
Want a low rate? High rewards? A prestige cashback card? We’ve got the right card for your needs.
Simplify your life and save money when you refinance.
Alliant returns profits to our members through higher savings rates, lower loan rates, and fewer fees. And we make it easy to bank with 24/7 account access.
Teen Checking – with smart limits and parental monitoring – helps you teach money skills.
Return to The Money Mentor Blog
By Pam Leibfried
Note: This article has been updated for the 2016 tax year.
Filing taxes can be stressful, and nobody wants to make a mistake that will result in added IRS scrutiny or an audit. Below are a few tips to help you avoid some of the most common tax mistakes, along with some updates for the 2015 tax year.
If you file on paper and mail in your tax retur, IRS statistics show that you are 20 times more likely to make an error. Filing electronically can help you avoid mistakes — tax software will flag common errors and prompt you for missing information — and it also means that you’re likely to get your refund much faster.
Even the best and most accurate typist sometimes makes an error. Double-check your return to make sure that your personal information, Social Security number and the info from your 1099(s) and W2(s) is entered accurately. If you have your refund direct deposited into your bank account, double-check that your account number and the routing number of your bank or credit union are correct.
If you’re a college student, be sure to coordinate with your parents before you file your taxes. If they are claiming you as a dependent on their tax return, you can’t claim an exemption for yourself on your tax return. And if you file first and claim the exemption for yourself, the cost to your parents could be steep — they might miss out on tuition credits and the exemption they can claim for you as their dependent.
If you have healthcare coverage through your workplace, you have received a 1095-B or 1095-C form from your employer. You do not have to send the forms in with your tax returns, but you need to keep them with your tax papers so that you have them in case of a future audit.
If you purchased coverage on the healthcare exchange, you received form 1095-A. You’ll need to use the information on this form to complete Premium Tax Credit Form 8962, and “reconcile” the premium tax credit used on the exchange (based on what you thought your 2015 income would be when you purchased your policy in 2014) versus the tax credit amount you qualify for (based on your actual 2015 income).
If you itemize deductions, you probably know that you can deduct your state and local income taxes. But if you live in a state with no state income taxes — or if you just don’t pay much in state income taxes — you can instead deduct the state and local sales taxes you paid. And if you’re reading this and thinking to yourself that the sales tax deduction is no longer available, you’re in luck — congress brought it back and made it permanent late in 2015!
Pro tip: Even if you live in a state that has state income tax, a large purchase like a new car or boat could mean that deducting sales taxes would be a better deal for you, so be sure to do the math before you finalize your itemized deductions.
If your income exceeds certain thresholds, your deductions could be reduced. These reductions kick in when your adjusted gross income (AGI) is more than $258,250 for singles, $309,900 for married filing jointly, $284,050 for head of household or $154,950 for married filing separately. When you reach these limits, you’ll have to reduce your deductions by three percent of the amount by which your AGI exceeds that threshold.
If you contributed less than the maximum amount allowed to your Health Savings Account (HSA), traditional Individual Retirement Account (IRA), SEP-IRA or Solo 401(k) in 2015, you have until April 18, 2016, to make additional contributions for the 2015 tax year. For example, if you max out a traditional IRA in the 25 percent tax bracket, your $5,500 IRA contribution could boost your 2015 tax refund (or reduce your tax bill) by over $1,000.
Pro tip: Be sure that you let your plan provider know that the contribution you are making should be applied to the 2015 tax year so they don’t mistakenly apply it to your 2016 contribution limits.
Have your refund direct deposited into your checking account. You’ll get your money faster, and you won’t have to worry about your refund being intercepted or lost in the mail.
If you have a MyRA retirement account that you didn’t already max out, the IRS now gives you the option to have your tax refund direct deposited into your MyRA account to boost your retirement savings.
If you’re filing a paper return, be sure to sign it before you drop it in the mail. If filing electronically, you’ll need to “sign” your return using a PIN. The IRS will not process your return, or send your refund, if your return is unsigned, whether by pen or by keystroke.
Pam Leibfried is a marketing content specialist whose love of words led to a writing and editing career. After a brief stint teaching English, she transitioned to corporate communications and spent 20 years at The Nielsen Company before joining Alliant’s content development team. Early in her work life, Pam’s friend Matt explained the benefits of a 401(k) and her dad encouraged her to start a Roth IRA. Their good counsel prompted her to prioritize retirement savings, which just might enable her to retire early so she can read more and live out the slogan on her fave T-shirt: “I have a retirement plan: I plan on quilting!”