4 Mistakes To Avoid When Filing Taxes

One of the most common reasons taxpayers get in trouble with the IRS is making mistakes when filing their returns. If not addressed promptly, these errors can lead to more complex tax issues, which taxpayers should strive to avoid at all costs. In this article, we’ll discuss the four mistakes to avoid when filing taxes and how to prevent them so that you can stay out of trouble and remain compliant with the current tax regulations. 

 

Mistake 1 – Filing Taxes Late

Tax forms with a yellow post-it note that says "Tax time!" with a mini alarm clock

Why Filing Late is a Problem

Once the deadline has passed, penalties and interest will start immediately. These fees can accumulate quickly and become a significant financial burden. The penalty is 5% of the unpaid taxes for each month (or part of a month) that your return is late, with a maximum penalty of 25%.

Filing late will also delay refunds. The IRS processes tax returns on a first-come, first-served basis, so if you file late, your return will likely be placed at the back of the line. By filing on time, you can avoid all of these unnecessary expenses and receive a timely refund. 

 

How to Avoid Filing Late

Preparing early and effectively organizing your schedule and documents are the keys to avoiding filing late. 

One method of ensuring that you know the critical dates and avoid filing your taxes late is to mark the various tax deadlines on your calendar. Another crucial step is to prepare your documents in advance. This will help you locate the appropriate documents and organize them in a manner that is easy to locate when it is time to file your taxes.

If, for some reason, you won’t be able to file your taxes on time, consider applying for an extension by filing form 4868. If the application is approved, you’ll be granted an extension to file your tax return without incurring penalties, with a new deadline (typically October 15). 

 

Mistake 2 – Incorrect or Missing Information

The next mistake to avoid when filing taxes is submitting returns with incorrect or missing information. While some of these errors may appear minor, they can have serious consequences. 

For example, a misspelled name or an incorrect social security number can cause the IRS to reject your return, further delaying the process. Errors such as incorrect filing status or missing income from multiple sources may also result in audits. Therefore, double-check all information before submitting or seek professional assistance to ensure it complies with the most recent regulations. 

 

Frustrated man looking a tax documents

 

Mistake 3 – Claiming Ineligible Deductions or Credits

Misunderstanding Deductions and Credits

Deductions and credits are ways for taxpayers to reduce their tax liability. Claiming these benefits when you aren’t eligible is one of the most serious mistakes to avoid when filing taxes, as it can result in major tax issues. 

For example, claiming a home office deduction when the space is unused for business or claiming the child tax credit when the dependent does not meet the IRS’s requirements. Possible outcomes include repayment, in which taxpayers must repay the deduction or credit plus interest and penalties, or IRS audits, where the authorities will investigate your finances further. 

 

How to Correctly Claim Deductions

Claiming deductions can help lower your taxable income, but following the requirements is vital to do so correctly to avoid penalties and other tax problems. 

First, understand the different deductions and credits available (standard and itemized deductions). Next, review the criteria to verify your expenses are eligible. Keep records of your invoices, receipts, and other documents as proof of your deductible expenses. And finally, stay updated with the latest regulations so you don’t miss out on crucial information, as tax laws often change. 

W-2 form with a pen and sticky notes on top

 

Mistake 4 – Not Seeking Professional Help When Needed

Filing taxes can be complicated, let alone dealing with tax issues. Professional assistance can greatly improve your chances of achieving the desired result. Tax attorneys possess the necessary knowledge and experience to navigate the complexities and intricacies of tax regulations. 

Aside from assisting you in managing your taxes, ensuring that there are no errors, and avoiding problems, professionals can help determine whether you are eligible for any deductions or credits, allowing you to reduce your tax liability and save money. By seeking professional assistance, you increase your chances of a successful outcome while reducing the stress of dealing with tax codes and communicating with the authorities. 

 

Why Choose Greenberg Law

Greenberg Law Group has successfully assisted clients in managing and dealing with various tax issues, from simple tax filing to more complex matters requiring effective communication with the IRS. 

Greenberg Law Group is confident that we can guide you in the right direction, develop a personalized strategy, and work hard to achieve the best possible outcome for your tax needs.

Contact us today to start sorting out your taxes and resolving any tax issues you may have! 

 

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