A minor mistake on your tax return can cost you big time. The IRS imposes penalties for errors, and they can add up quickly. Discover two mistakes to avoid when filing your taxes.
1. Filing Incorrectly
The IRS has a variety of forms that you can use depending on your tax situation. Therefore, you should be keen to ensure you select the correct form. Otherwise, you may end up owing money or not getting the refund you're entitled to. If you're unsure which form to use, get help from a business tax preparation professional or use the IRS's online tools.
Furthermore, pay attention to deductions and credits, and only take what you are eligible for. Claiming the wrong deductions can trigger an audit from the IRS. To avoid this, familiarize yourself with the rules for claiming deductions and only take deductions that you're eligible for.
In the same way, you should be keen when reporting income and ensure you include income from all jobs and investments. Failure to do so subjects you to costly penalties from the IRS.
Go through your records and list all the money you earned during the year. The income includes salary, tips, interest, dividends, and any other money you receive. This step reduces the chances of leaving any taxable funds out.
2. Not Hiring a Business Tax Preparer
Some individuals opt to file taxes independently instead of hiring a business tax preparation professional. This move can become costly if you're unfamiliar with the tax code. A business tax preparer helps you maximize your deductions and ensure you don't make any mistakes that could cost you money.
Furthermore, a tax preparer helps you save time. You will have more peace of mind knowing that your taxes are done correctly.
While you have a range of do-it-yourself tax software options, the software can't always catch every mistake. And if you make a mistake, you will have to pay the penalties. Hiring a professional tax preparer can help you avoid errors and save you money in the long run.
However, choose your tax filing preparer wisely. For example, you can use trustworthy referrals or online reviews to settle on an excellent one. In addition, ensure the business tax preparation expert is registered with the IRS. You can check this by asking for their Preparer Tax Identification Number (PTIN).
While you probably don't like the tedious work of filing taxes, making mistakes on your return can cost you even more. Therefore, don't hesitate to consult a business tax preparation company to minimize errors and ensure you comply with the tax law.Share
26 July 2022
I have always dreamed of opening my own beauty salon, but never seemed to have the money to make that dream come true. I decided that it was time for me to hire an accountant to help me create a savings plan and to assist me in calculating how much money I would need to open my salon. I found out all about what it takes to start a business and a lot of great advice about what I can do to save the money I need to make it happen. If owning your own business is something you are dreaming of, my blog can help.