Each year, millions of people overpay their taxes — or pay too little — because they make math errors, type in incorrect information or overlook deductions and credits. Here are some tips for avoiding last-minute blunders that could cost you money or prompt a sternly worded letter from the IRS:

•Double-check your Social Security numbers. The numbers on your tax return are matched against Social Security numbers in the IRS computers. If you write down the wrong Social Security number for one of your dependents, the IRS will disallow the dependent, recalculate your tax return and send you a bill for the remaining money you owe, says Tom Ochsenschlager, vice president of taxation for the American Institute of Certified Public Accountants. Straightening out the mess, he adds, "is just a pain in the neck."

•Keep track of changes in the tax code. There weren't as many big changes in the tax code this past year as in the past, but one new deduction could lower taxes for millions of homeowners: This year, for the first time, households with adjusted gross income of $100,000 or less can deduct government and private mortgage insurance premiums from their taxes. (Taxpayers with income of up to $109,000 can take a partial deduction.)

Many borrowers who can't afford a 20% down payment must pay mortgage insurance, which is designed to protect lenders against default. The deduction is limited to insurance premiums for mortgages issued after Dec. 31, 2006. The Mortgage Insurance Companies of America, a trade group, estimates that the deduction will save the average homeowner $350.

•Don't assume you'll save money by itemizing. Every year, millions of taxpayers shortchange themselves by claiming the standard deduction instead of itemizing. That's understandable, because claiming the standard deduction is certainly easier than adding up all your deductions. But sometimes, Ochsenschlager says, taxpayers err in the other direction, itemizing when claiming the standard deduction would result in a lower tax bill.

Most homeowners, for example, itemize on their tax returns so they can deduct interest on their mortgages. In the early years of your mortgage, that deduction can significantly lower your tax bill. But if you've lived in your home for many years and have paid down most of the interest on the loan, your mortgage-interest deduction might be so small that you're better off taking the standard deduction. For 2007, the standard deduction is $10,700 for married couples filing jointly, and $5,350 for single filers.

•Don't forget to take advantage of unused losses. The IRS imposes annual limits on the amount you can deduct for capital losses. The most you can deduct against ordinary income, after you've offset any capital gains, is $3,000. But if your net losses exceeded $3,000 in 2006, you can carry the unused losses over to 2007 and use them to offset any gains. If you don't have any gains, you can deduct up to $3,000 against taxable income.

Unused losses can be carried forward indefinitely, but many taxpayers mistakenly think that once they've claimed their $3,000 deduction, "that's the end of the story," Ochsenschlager says.

Buying time

If all this is too much for you to handle, you can file a request for an extension until Oct. 15. You don't have to give a reason for your tardiness; approval is automatic. Use IRS Form 4868 to file for an extension. You can e-file the form or download a copy at www.irs.gov. And don't forget about your state tax return, says Stephen Buschel, tax partner with BDO Seidman in New York. Most states also provide an extension, but you need to file a request.

While an extension will give you six more months to get your act together, there are two important caveats:

•An extension doesn't give you more time to pay. If you owe the IRS, the payment deadline is April 15. You're required to estimate, as accurately as possible, how much you owe and pay that amount when you file your extension, Buschel says. Otherwise, he says, you'll owe interest and possibly penalties on the unpaid balance.

•Filing an extension will delay your tax rebate. Starting next month, millions of taxpayers will receive rebate checks ranging from $300 to $600 ($1,200 for married couples). The rebates, part of an economic stimulus package approved this year, will be based on your 2007 tax returns. The IRS won't process your rebate until it receives your tax return. If you postpone filing your return, you'll have to wait longer for your rebate.

Sandra Block covers personal finance for USA TODAY. Her Your Money column appears Tuesdays. Click here for an index of Your Money columns. E-mail her at: sblock@usatoday.com.

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