The IRS Is Quite Happy To Keep The Extra Money, If You Let Them...Learn How To Get Back A Tax Overpayment!

In 2006, The Internal Revenue Service estimated the average American overpaid their taxes by more than $400 as a result of missed deductions and credits. Even if $400 doesn’t sound like a lot of money to you, it all adds up to more than ONE BILLION DOLLARS that we are handing over to the government this year which we don’t owe!

When it comes to a tax overpayment, you need to know your rights and options. The most important point to remember is that your money is NOT gone forever if you know what to do.

Sometimes the IRS will send a notice concerning the overpayment and may even make an adjustment for you, but most of the time they don’t. Why not? Because they have no way of knowing you missed a tax break available to you. It’s really YOUR CHOICE if you take some tax breaks or not. The IRS is not going to twist your arm to lower your taxes and is quite happy to take your “voluntary contribution.”

Why do so many Americans over pay their taxes even if they used a paid preparer or well-respected tax software program:  mostly because of careless errors or lack of knowledge?  The IRS tax code is over 15,000 pages long and the interpretations of the code extend over 100,000 pages! So it’s very easy to miss even some relatively simple tax breaks because of the complexity of our tax system.

Here are some of the most common tax mistakes that can cause an overpayment:

1. Transposing Numbers. The worst error you can make is to transpose digits when writing dollar amounts e.g. writing $35,907 instead of $39,507. This type of mistake can cost some major headaches and hit your wallet hard.
2. Opting for the standard deduction instead of itemizing. With a few exceptions, it is generally better to itemize your deductions which can lower your taxes.  According to the Government Accountability Office, there are actually more than two million taxpayers who do not itemize their taxes every year and end up overpaying because of it.
3. Overlooking deductions. It is an easy mistake to make. When you itemize your deductions, make absolutely sure you exhaust all possible deductions. Spending some extra time on this is worth your while. Taxpayers tend to overlook such things as charitable contributions, medical expenses, gambling losses, traveling expenses, clean-fuel deduction, education expenses, and job expenses that their employers don’t reimburse them. You may even be able to deduct your tax preparation expenses. See our article on the Most Overlooked Tax Deductions for more information.
4. Sloppy/Bad math. The IRS reports that basic arithmetic errors rank as the number-one mistake taxpayers make, every single year. An excellent way to avoid math errors is by using tax preparation software or a tax professional.
5. Not planning your taxes. Keep your taxes in mind every month of the year. Yes, it is a pain, but keeping records of those little tax-deductible things that pop up on a daily or weekly basis will save you a lot of tax dollars in the long run. Be sure to keep documents, receipts, and any bills from if you want to get the most out of your itemized deductions. You should also keep those receipts in separate files so that you do not have to sort them out at the end of the year.

So, you feel you may have overpaid your taxes this year or in the past. NOW what should you do?

• If you KNOW the mistakes you or your preparer may have made, you can file an amended return (Form 1040X) for your current and up to three previous year’s tax returns.

• If you DO NOT know exactly what mistakes were made, you probably should take your returns to a professional tax firm to get a second-opinion. PRO-TAX will provide this service for FREE, while others may charge a fee to confirm your return.

If you would like the confidence of knowing you paid the absolute minimum taxes required by law, you should come by a PRO-TAX office today. We provide a professional tax review at no charge. Even if you have never filed your taxes with us, we are happy to assist you. We simply want to help you find mistakes, before the IRS does, and get you more money back.  If we DO find an error we’ll amend your return for just $45- then give you a $45 discount off your 2009 service. 

Now if you don’t have time to sit in our office and wait for your free review, we offer our convenient “drop-off” service.  Simply bring the completed returns by one of our offices at your convenience and we’ll call you when it’s ready. 

Our offices are open from 9am-6pm M-F; and 9am-1pm on Saturdays.  If you need to come in earlier or later just give us a call and we’ll make arrangements. 

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