A common example would be a divorced couple who alternate years claiming a qualifying child. Both parents can claim Head of Household (assuming they meet the criteria) every year no matter which year they are actually claiming the qualified child as a dependent. This one change would make a difference of $2,900 for tax year 2014 in their standard deduction! In addition, the parent does not have to claim the qualifying child as a dependent on their tax return to qualify for the Earned Income Credit. If the parent who is claiming the qualifying child as a dependent is not eligible for the Earned Income Credit due to their income, the other parent can claim the Earned Income Credit on that child even if it is not their year to claim the child as a dependent. Many times the Earned Income Credit goes unused because the tax payer who is not claiming the qualified child as a dependent on their return is not aware they can still claim the Earned Income Credit for that child as long as the meet the criteria for filing Head of Household and the criteria necessary to claim the Earned Income Credit. This is possible when both parents have a very active role in the qualifying child’s life and share the responsibilities, care, and expenses related to the raising the child. The Earned Income credit limits for 2014 and the money that goes unclaimed in this situation are as follows:

Tax Year 2014 maximum credit:

· $6,143 with three or more qualifying children

· $5,460 with two qualifying children

· $3,305 with one qualifying child

· $496 with no qualifying children

With this said a tax payer could leave as much as $9,043 unclaimed that they qualify for.

Another common mistake tax payers make is using software to self-prepare their taxes and incorrectly answering the software’s questions. If you are not familiar with reviewing the final printed version of the self-prepared tax return to make sure all of your deductions and income flowed to the correct line numbers on the return, I strongly recommend having your return prepared by a profession Certified Public Accountant or having it reviewed before you submit it. Many tax payers answer the questions then file the return assuming they answered them all correctly and the final numbers did not flow to the correct line items. This can cause audits and unclaimed refunds that could have been avoided if the tax payer was otherwise knowledgeable in knowing what the final product should look like before they press the submit button.

Finally, many taxpayers just miss many deductions they are otherwise eligible to claim due to not knowing the tax code or being afraid to claim things based on advice they have heard from friends and family or fear of the IRS. I do not recommend ever comparing your tax situation with a friend or family member in an effort to determine what your tax return should look like as there are so many unknown factors that go into the final result. Many tax payers will assume if their friend or family member has the same number of dependents and the same type of income act ivies that their return should be similar and this is simply not the case.

Never purposefully choose to avoid a deduction you are eligible to take because you are afraid of an IRS audit or because you heard the particular deduction was considered a “red flag”. No deduction written in the IRS code is a “red flag”. A “red flag” only arises when the tax payer is not educated on how to claim the deduction properly on their tax return. And remember ANYTHING is fixable if you make a mistake. I highly recommend having your past three years of tax returns reviewed by a professional if you feel you have not taken the deductions you deserve. In addition, if you miss filing a year that puts you in fear of filing the next year to the point the situation escalates to many years of unfiled returns remember it is NEVER too late to catch up. Do not be ashamed or embarrassed if you have not filed for several tax years due to life situations that prevented you from filing. Seek a Certified Public Accountant out immediately to correct the situation and get you back on track.