Getting your tax information together? Tax time is almost here, and it never hurts to start planning ahead. If you do your own taxes, you likely know that it can be a complicated process. It can be easy to make a mistake that leads to an expensive correction or even an audit. If the mistake causes you to underpay your taxes, you could face penalties, interest, or more.
Below are a few common mistakes to avoid this tax season. A tax preparation service can help you get your taxes right the first time and avoid costly penalties down the road. If you're planning on doing your taxes yourself, consider the alternative of working with a professional.
Waiting until the last minute. This is a common problem for many tax filers, especially those who think they may owe money. Unfortunately, if you wait until the last minute, you may find that you don't have time to get it done. Or, you may miss crucial deductions or credits because you're in a hurry. In the worst case scenario, you may miss the deadline altogether. While the Internal Revenue Service (IRS) could allow you to file for an extension, you'll likely face interest on any taxes you owe.
You can avoid this mistake by meeting with a tax professional well in advance of the deadline. They can help you identify any issues you may face and offer advice on setting up a payment plan with the IRS or even filing for an extension.
Missing out on deductions and credits. The tax code changes all the time. The IRS is constantly making adjustments to various deductions and credits. When the federal government passes a new tax law, there is a wide range of changes that can take place. It's tough for the average person to keep up with every new tax development.
You may be eligible for deductions and credits that you didn't even know existed. There are the standard deductions and credits for marriage, kids, and more. However, there are also deductions related to business expenses, moving, and even working from home. A tax professional can help you identify all potential deductions and possibly save you big money.
Using the wrong forms. The IRS offers a wide range of forms and schedules, each designed for a different type of filer. The 1040EZ is used for the simplest and most straightforward tax situations. However, depending on your needs, there are many other forms you may need to use. If you're filing separate deductions, you may need additional paperwork. The same is true if you have business expenses. Additionally, if you are married but filing separately, you may need additional schedules. Again, a tax preparation professional can help you identify the right forms so you avoid penalties and fees.
Ready to get your taxes in order? Talk to a tax preparation service today. They can help you analyze your tax situation and recommend a filing strategy.