Avoid These 10 Common Tax Mistakes

10 Tax Tips to Keep You Out of Trouble

It can become a simple task to make tax mistakes since the US tax code consists of almost four million words, but you can consult Coral Springs tax attorneys for help. Even the Internal Revenue Service’s own people pack a copy of it in their briefcases for reference. No person memorizes it all.

At Bakalar & Associates, our Florida tax certificate attorney wants to make it easier for you, so we’re offering these ten essential tips to help you avoid mistakes that could cost you money or get you into trouble. By adhering to these ten tips offered by Coral Springs tax attorneys, you can make your life easier and need to hire us less.

1. File on time.

The earlier you start on your taxes, the better. About one-fifth of US taxpayers wait until the week before the tax due date to start on their taxes. This causes many of them to miss the deadline. That can result in late fees. The typical deadline is April 15, although the IRS did alter that during the COVID-19 pandemic. If you owe taxes and do not make your payments on time, the IRS charges you interest.

2. Avoid making math tax mistakes.

You can easily avoid this problem by using software that conducts automatic calculations for you. Rather than trying to derive the answer using the IRS formulas, let the computer do it for you. You can use cloud software for this, so you do not use hard drive space on your computer.

3. Double check your forms for mistakes or missing information.

The aforementioned software checks the numerical items and math for you. It will flag for you any items you did not fill out. You must proofread your items though to make sure that you typed your Social Security number properly and spelled your street address or office address correctly. You can import your prior year’s return information when using these software programs, which makes things much easier.

4. Keep a copy of your last seven years of returns.

The IRS has three years to legally audit you if they suspect you of under-reporting income. You need to be able to quickly obtain your returns, so you and your Florida tax certificate attorney can best prepare your defense. When you use tax software, it typically saves these for you and offers you a download of each.

5. File the appropriate tax forms.

Until 2018, filing seemed more complex because you chose between three main forms – 1040, 1040A, or 1040EZ. Since 2018, though, everyone uses 1040. You need to know which of the six schedules to file with it though. For example, business owners report their profits and losses on Schedule C.

6. Double-check your account numbers.

Whether you obtain a refund or make a payment, you need to provide accurate bank account routing information. You delay your refund by entering it incorrectly or incurring late fees for making a late payment.

7. Check for tax credits and deductions. 

The IRS offers numerous tax credits and exemptions. Each child you have under the age of 18, for instance, creates a tax credit. The Child Tax Credit can cut up to $2,000 off of what you owe. Most tax software calculates your tax using both the standard deduction and with your itemized deductions, then suggests you take the larger one. This reduces what you owe and can earn you a refund.

8. File under the correct status.

You could file as single, married filing jointly, married but filing separately, qualifying widow(er), or head of household. Each has a different income tax rate, and each qualifies for different standard deductions.

9. File your taxes.

Some individuals skip filing. Some do this because they feel overwhelmed by their total tax bill. The IRS offers installment payment plans though, so you should file and request a plan. You will save money that way by avoiding getting audited and charged interest plus penalties and tax evasion charges. Some people do this because they do not owe taxes and they see no reason to file. They probably qualified for a refund though, especially in light of today’s tax credits. Filing can net you extra money in these cases.

10. Keep up on the latest tax news.

It may not sound exciting, but you need to keep up with the IRS and what it changes about the tax law. The Coral Springs tax attorneys at Bakalar and Associates can help. Let our Florida tax certificate attorney assist you with your personal and/or business taxes. Call us today.