Common Tax Mistakes That Can Cost You Lots of Money

Common Tax Mistakes That Can Cost You Lots of Money

Generating enough income to take care of yourself and your family is something you should view as a priority. Every year, you have to report the money you have made in a fiscal year to the Internal Revenue Service (IRS). Each year, over 57 million Americans self-prepare and file their own taxes. While this may sound like a good idea, this DIY approach to tax preparation can lead to lots of problems. 

If you are unsure about how to approach the tax filing process, it is only a matter of time before mistakes are made. These mistakes can lead to things like penalties and IRS audits. Rather than dealing with these headaches, you need to work on finding tax preparation professionals to assist you. The following are some of the most common tax mistakes people make when handling this complicated process alone. 

Failing to Take Advantage of Tax Breaks

The United States tax code is extremely complex and hard to understand. If you don’t have a full grasp of this tax code, filing your individual tax returns is a horrible idea. One of the most common mistakes people who take on this difficult task alone make is failing to take advantage of all of the tax breaks they are eligible for. There are a number of tax breaks that apply to both students and families. 

Failing to take advantage of things like the Child Tax Credit can lead to you paying a lot more to the IRS. Some people think that taking the standard deduction is the best way to make the tax preparation process easier. In some cases, itemizing your deductions may be beneficial. The only way to figure out the best approach to your income tax filing is by working with a professional tax preparer. They will be able to look at your financial and work situation before offering suggestions on how to file. 

Filing on Time is Essential

Procrastinating when it comes to filing your taxes can be very problematic. On average, over 20 percent of Americans who wait until the week before the tax filing deadline to get this process handled. Waiting until the last minute can lead to lots of mistakes being made. If you miss the deadline altogether, you run the risk of being fined for this mistake. While you can file an extension with the IRS, you will have to pay any taxes you owe on the deadline to avoid additional penalties. 

Avoid Using the Wrong Filing Status

One of the most important decisions you will have to make when filing your taxes is choosing the right filing status. Your filing status dictates the type of deductions and tax breaks you are eligible for. If you choose the wrong filing status, you may end up paying a lot more into the IRS. Instead of allowing confusion about the tax code to cost you money, you need to work with a tax preparation professional. 

Looking For Professional Tax Filing Help?

If you are tired of making mistakes on your taxes that cost you lots of money, let the professionals at Simple Tax of Laredo assist help you out.

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