With the 2005 tax deadline looming, taxpayers may be confused about the current changes. Understanding those changes could mean the difference between filing an accurate or inaccurate return.Linda Engelman, a certified public accountant since 1982, said there are many changes to the 2005 tax rules.People will not apply for multiple extensions; rather, they will be given an Oct. 17 deadline when they apply for an extension.While this gives taxpayers extra time to file, it does not relieve them of making their tax payment. It’s an extension to file, not an extension to pay what is owed, Engelman said.She also said there are now many avenues available for taxpayers to file their return.Every year, there are more electronic and online options available. Electronic filing is becoming popular. When filing electronically, returns can be filed immediately but payment doesn’t have to be made until April. Extensions can be filed electronically, too, Engelman said.Another change to the 2005 tax laws is the standard mileage rate a taxpayer deducts. Engelman said, because of increased gas prices, the standard mileage rate for the last four months of the year is higher than the rate for the first eight months of the year. Engelman said the standard mileage rate will likely decrease for next year, though.She also said the definition of a child for tax returns has been standardized, so it could affect how people do their taxes.H&R Block representative Debbie Davids said another change for 2005 is the amount of deduction an individual can take for a donated vehicle. In past years, she said, the individual determined the value of the car for the deduction on their return. This year, the amount that can be deducted is the amount the charity received from the sale of the vehicle.Davids named the 10 most common mistakes people make when filing their tax return:
- The Social Security number is incorrect
- The SS number is missing or does not match the name.
- The required documentation is not attached.
- The return is not signed.
- An incorrect filing status is recorded.
- Mathematical errors, including incorrect number entry
- The standard deduction is used when an itemized deduction is more advantageous.
- The Social Security taxable benefits worksheet is not completed.
- Filers fail to claim credits or figuring credits incorrectly
- Filers omit income items, such as interest from checking or savings accounts.
