Holicent
VIP Contributor
The seven most common mistakes people make when filing taxes are:
- Filing taxes late: If you file your taxes late, you may incur interest and penalties that quickly add up. Even if you are unable to pay all of your owed taxes, it is still essential to file your taxes on time.
- Not Using Every Credit and Deduction: Many taxpayers pay more in taxes than they should because they don't claim all of the credits and deductions they are entitled to. Research all available tax deductions and credits and make sure to claim them on your return.
- Inadequately maintaining records: When it comes to preparing your tax return, it is essential to keep accurate records of your income, expenses, and deductions. Throughout the course of the year, make it a point to organize all of your receipts, invoices, and other relevant documents.
- Not Hiring an Expert: It can be difficult to keep up with all of the changes to the tax laws, which are both complicated and constantly evolving. You can make sure to take advantage of all of the tax breaks that are available to you and avoid making mistakes by hiring a tax professional.
- Not Paying the Estimated Taxes: You may be required to pay estimated taxes throughout the year if you are self-employed or have other income that is not subject to withholding taxes. Penalties and interest may be assessed if these taxes are not paid in full and on time.
- You Didn't Check Your Tax Return: Before submitting your tax return to the IRS, it is essential to check that all of the information is correct and complete. Making corrections can take time and effort as well as be costly.
- Not Reacting to IRS Notifications: It is imperative that you respond promptly whenever the IRS sends you a notice. In some instances, it may even result in legal action if an IRS notice is ignored, in addition to additional interest and penalties.
