Twelve Common Tax Mistakes That Waste Time and Money

by Brandom Ballenger

Experience is simply the name we give our mistakes. - Oscar Wilde

As parents know, some lessons are best learned the hard way. Taxes, however, aren't one of those times.

Messing up on taxes is common. In the best cases, it could mean a delayed refund. But it could also mean a smaller refund, spending extra money and time to amend your return, or in the worst case, facing an audit.

Tax software helps avoid a lot of errors – especially the math kind – but it can’t fill out personal information or replace common sense. These days, that’s where the most frequent mistakes happen.

In the video, Money Talks News founder and CPA Stacy Johnson covers some of the most common tax errors. Check it out, and learn more on the other side….

The tax code runs thousands of pages and is constantly changing, so it’s easy to make mistakes. But experience shows we tend to make the same ones, over and over. Here’s a checklist to help you out…

1. Social Security info

What’s on your Social Security card goes on the return – if your name is wrong there or has been changed, contact the Social Security Administration. Getting your number wrong, or that of a dependent or spouse, is even worse: The number might belong to someone else. This kind of error can completely stop the whole process.

2. Math

Software can help, but not every program spells out every step of the process. In some cases you may still have to tally numbers on the side to enter totals. When you do, triple-check your work.

3. Signature

It’s like turning in homework without your name on it: no name, no credit. Make sure you sign your return – and the check, if you’re sending one. Otherwise you may face delays or penalties.

4. Wrong form

Again, software often helps here by picking the relevant forms. But sometimes using a 1040EZ won’t get you as much money as a 1040 or 1040A. And certain situations require additional forms or numbers in different places. For instance, where you claim a home office deduction differs depending on whether you are an employee, self-employed, or a business partner.

5. Paying

There are a lot of tax software options, with varying fees for preparing, filing, and amending, not to mention state returns if that applies. But if your income is under $51,000, chances are you can get your taxes prepared and filed for free. Check out 4 Ways to Get Your Taxes Done Free.

6. Going pro

If you have a simple tax situation that hasn't changed much since last year, there’s no reason to pay a professional: All they’re going to do is use the professional version of software you can buy (or get free) yourself. Check out 9 Tips to Pick a Tax Pro– If You Need One.

7. Waiting on a check

Filing your return electronically through the IRS Free File is always free, no matter your income. But however you file, do it electronically and sign up for direct deposit and your refund will most likely hit your account in less than two weeks. Just don’t forget to triple-check your bank account number to make sure the money doesn’t end up in someone else’s account.

8. Hiding income

This can happen accidentally if you have multiple employers, or if a W2 or 1099 goes missing. So take your time, think it through, and make sure you report everything – not just from your job but also investments and anywhere else that might be reporting to the IRS. Ideally you’ll track this throughout the year so you can’t forget.

9. Missing deductions and credits

Polonius from Hamlet said, “Neither a borrower nor a lender be.” He was a jerk.

But he was right too – don’t leave money on the table, at least not for the government. Did you buy a home in the past year? Go back to school? Life changes and major purchases may mean tax benefits. And don’t forget to see if you can claim a home office deduction.

10. Taking out a refund loan

If you’re desperate for your refund money, realize the interest charges on a refund anticipation loan or check only make things worse. Read why in our story from last year, Kiss Refund Loans Goodbye, and learn about a better idea: changing your tax withholding so you get bigger paychecks year-round.

11. Procrastinating

Tax Day is April 15 – and many people have already received their refunds. From the date this article was published, you have 53 days to get the job done right. So don’t short-change yourself literally and figuratively by waiting until the last minute, and then rushing through it. That’s how you make dumb mistakes and forget things that could have lowered your bill or gotten you more back.

12. Blowing it

Once you get your refund, don’t make the mistake of misspending it. Use it wisely: to pay down debt, get tax advantages for next year, or at least do something memorable and fun. Whatever you do, don’t fritter it away. We’ll have a story next week on smart uses for your tax refund.

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How A Family Of Four Manages To Live Well On Just $14,000 Per Year

by Mandi Woodruff

In the years since the recession, the median household income in the U.S. has dropped to just over $50,000, while fixed costs like health care, higher education, and housing have only soared. Now imagine trying to support a family of four on a fraction of that income.

It's a reality that stay-at-home wife and mother of two Danielle Wagasky has lived for the last four years. And, perhaps a little surprisingly, she wouldn't have it any other way.

Wagasky, 28, lives with her husband, Jason, 31, and their two young children in a three-bedroom family home in Las Vegas, Nevada. While Jason, a member of the U.S. Army, completes his undergraduate studies, the family's only source of income is the $14,000 annual cost of living allowance he receives under the G.I. Bill. Despite all odds, the family has barely any credit card debt, no car payment, and no mortgage to speak of.

Wagasky has been sharing her journey to living meaningfully and frugally on her blog, Blissful and Domestic, since 2009.

She was kind enough to chat with BI and tell us how she makes it work.

Wagasky finds inspiration everywhere from the library to tips from readers on her blog.

"My husband told me he'd heard about this book, America's Cheapest Family Gets You Right on the Money" she said. "We talked about it over the phone and I read it and thought how it could apply to us."

The couple had a single savings goal in mind - scraping together $30,000 for a down-payment on their home in their native Henderson, Nevada.

The mindless spending was out, and Wagasky came up with a budget she could make work. "I changed the way I was grocery shopping and started working my way up, " she said.

She stopped eating out and learned how to cook.

Wagasky barely knew her way around a kitchen when she started her money makeover.

Now she's an avid cookbook collector (she checks them out from libraries or asks for them as gifts to save), and it's one of the simplest ways she's managed to cutback on spending.

With a $7 bread-maker she scored at a local thrift shop, she never spends on store bought slices. She's not shy about professing her love for wholesale stores like Costco, which is her go-to source for baking ingredients.

Everything in the home is either hand-sewn and or made from scratch.

"Everything must be budgeted," Wagasky wrote in a June entry on her blog. "From family outings, to toiletries to clothes purchases. It must be budgeted."

And she takes Do-It-Yourself to the extreme. Everything from laundry soap and clothing to the kitchen her husband installed in their new home was either crafted by hand or thrifted.

She swears by this home-made laundry detergent recipe.

The family swapped cable for Netflix and Hulu.

When it come to cutting costs, cable was as easy luxury to part ways with.

With two children aged 6 and 8 to entertain, Wagasky invests $14.99 in a Netflix plan and recently added Hulu to the mix.

The family also uses a simple antennae to pick up basic cable channels.

She goes to the grocery store once per month, pays cash, and never goes over budget.

With a single source of fixed income, there's no room for impulse purchases in the Wagasky household.

They budget $400 for groceries each month and that's it.

"Once that $400 is gone, it is gone," she writes. "There are no extra shopping trips made because there is no more money."

They are a cash-only household but keep a credit card for emergencies.

Wagasky said they have no credit debt, but they do charge emergency expenses on plastic when absolutely necessary.

"We recently had some medical bills we had to pay, and we were able to take our savings and pay those down as fast as we could," she said.

They fill up their tanks once per month and combine errands as much as possible.

With gas prices creeping higher each all the time, the Wagaskys watch their mileage like hawks.

That means combining errands together and doing all they can to make one tank of gas last a month.

"We know we don't get to drive and visit family often, so when we do we cherish it," she wrote in a blog entry.

"We don't go just for an hour, we stay and visit and even run errands that may be close to where we have family. We try to remember that when the gas is gone...it is gone."

They paid for both of their cars in cash and have no car payments.

After Wagasky's husband left active duty and started school, the couple knew they would only have $14,000 per year to live on.

So they paid off the $8,000 he owed on his truck while he was earning more and they could afford the expense.

They also bought a van, which they saved $10,000 for initially and were able to pay the remaining $12,000 owed within a year.

Having zero car payments is a nice relief.

She skips all kiddie snacks in favor of healthier, cheaper DIY options.

Like anyone with simple math skills, Wagasky was quick to realize how much cash she was wasting on prepackaged snacks for her children.

She cut them out completely and whips up homemade granola bars and trail mix instead.

If she can freeze food, she will.

If you're on a tight food budget, your freezer will become your best friend.

Wagasky chops vegetables and fruits and freezes them for a month. She actually does the same for dairy products like cheese, butter and yogurt.

"I am able to freeze about 8 gallons of milk each month," she writes. "They sit at the bottom of my freezer and we thaw them out when we need them." Baked goods get the same chilly treatment.

She uses a food co-op to save on fresh produce.

Wagasky was dubious about joining a food co-op, but after three months, she realized she would never beat the savings or quality she found.

Food co-ops pool membership fees together in order to fund a monthly harvest that's distributed at designated pick-up points.

A couple of times per month, Wagasky gets a basketful of in-season produce for $15 - way better bargain than she'd ever find in stores.

They took advantage of Nevada's declining housing market to score a cheap foreclosure.

By the time Wagasky's husband came home from Iraq, they had managed to scrape together the $30,000 they needed for a downpayment on a home.

"But we decided the best option would be not to have a mortgage payment at all," she said. "We found a fixer-upper that didn't have a kitchen ... and we paid cash."

Price tag: $28,000. With the leftover cash, they were able to finish the kitchen and install wood flooring throughout the house.

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Take Control of Your Life by Managing Your Emotions

by Georgia Kral

How many times have you found yourself getting angry and saying something you've regretted? Or feeling sad enough to skip out on an important event or meeting?

It doesn't have to be that way.

Author, counselor and talent representative Ken Lindner has been helping people harness their emotions for good use for almost his entire career. A Harvard University and Cornell Law School graduate, Lindner owns and runs the representation firm Lindner and Associates. He has helped develop the careers of big names in news and T.V., from Matt Lauer to Mario Lopez to Shepard Smith. His recent book, "Your Killer Emotions" is out now.

In "Emotions," Lindner lays out a path for those seeking to better handle their emotional responses to difficult situations.

"Your life is a reflection of your choices," Lindner said in a phone interview. "You can be the smartest person but if you're overwhelmed with emotions - if you're sad, angry or feeling hopeless - you often opt for the quick, emotion assuaging fix. But oftentimes that choice is counter to what's good for you or your career."

Lindner says the way to confront your negative emotions is to break the "toxic behavioral script." He offers these tips on how to do it:

1. First, you must identify and acknowledge that your emotional responses to situations have had a negative affect on your life.

2. Never attempt to deal with an important situation or life choice when you're overwhelmed with negative emotions. Give yourself a cooling-off period before moving forward.

3. Think about what it is that you truly want, and figure out the best way to get there. Don't react, make a plan.

4. Motivate yourself. If you're feeling disadvantaged, harness that energy for a good purpose.

5. Visualize your behavior. Before you head into a meeting, think about how you want to be perceived.

6. Make sure you understand what triggers a positive or negative emotional response.

7. Be "consequence cognizant." Think about how your reactions affect others.

8. Remember that by mastering your emotional response to situations, you will develop confidence.