Stay Out of Trouble by Avoiding These 5 Common Tax Filing Mistakes
Whether you file the simple 1040EZ or a complex 1040 and a raft of schedules, making a mistake on your tax form can lead to big tax trouble. Something as simple as a math error or unsigned form could draw extra attention from the IRS.
The tax agency sees those mistakes each year, and IRS representatives warn taxpayers to take care when filling out their forms. Even if you think you have everything filled out perfectly, it never hurts to double-check and look for these common tax day errors.
#1 – Assuming Your Tax Pro Prepared Your Taxes Properly Blindly trusting your accountant or tax preparer to file your taxes correctly can be costly. Of course you want to assume they do a thorough job, and most tax professionals do, but letting them file without your close review is a mistake.
We resolve back tax problems for clients, and often what gets people in trouble is a simple mistake; like forgetting to report income, missing deductions, or taking too many deductions.
These are sometimes honest mistakes, but if not caught early, can trigger red flags and have the IRS sending you letters of balances due.
No one knows your financial situation better than you do so it’s important you thoroughly check your return so you’re not blindsided with an unwanted surprise.
#2 – Waiting Until the Last Minute
Filing taxes is stressful enough. You do not need to make things worse by waiting until midnight on April 15 to get your return in the mail. Give yourself plenty of time to gather all the required documents and complete your return.
Keep in mind that unexpected problems could interfere with your last minute tax filing plans. Getting your taxes done before the last minute is the only way to protect yourself from unforeseen circumstances that can delay your tax filing.
#3 – Failing to File on Time
If you cannot file your return on time, you can ask for an extension by filling out a single form. Even if your documents are in disarray, there is no excuse for not filing on time. Filing an extension gives you six additional months to get everything in order and complete your return.
Keep in mind that you will still need to estimate the tax you owe and make your payment, even if you file an extension. Filing an extension gives you more time to get your return to the IRS, but it does not provide a reprieve from your tax debt. If you wait to make your tax payment, you will get hit with penalties and interest.
#4 – Not Making a Backup or Keeping Good Records Making backup copies of your tax returns, income documents and schedules is an important part of tax planning and preparation. Set up a folder or file box and use it to store your tax documents as they come in, and then scan each one before you put it away.
Once you have completed your return, be sure to make copies of every document, including your W-2 form and tax schedules, before sending the return to the IRS. If you file electronically, be sure to save a PDF copy of your return before completing the final step. Save all of those electronic tax documents on your computer or cloud storage device. Ordering a lost copy of a past year’s return from the IRS is time-consuming and costly. You can save time and money by making your own backup copies. If the IRS audits you or requests more information from you, all your records will be extremely helpful in the process.
#5 – Ignoring Letters From The IRS After You File Your Taxes. Sometimes the IRS will send follow up correspondence, especially if you owe money to the IRS. It can be easy to ignore the first few letters. Even if you have the intention of paying your taxes soon you should still act swiftly and either get on an installment agreement or reach out to a tax relief firm if your financial situation requires it.
OWE BACK TAXES?
Our firm specializes in tax problem resolution. We serve clients virtually so don’t hesitate to reach out. If you want an expert tax resolution specialist who knows how to navigate the IRS maze, reach out to our firm and we’ll
schedule a no-obligation confidential consultation to explain your options to permanently resolve your tax problem. We’re looking forward to serving you. www.mytaxcoaching.com.
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