The 5 Worst Personal Planning Tax Mistakes I’ve Ever Seen
When it comes to taxes I have seen it all . . . the person who turned in their taxes early, but didn’t sign their tax form and got a penalty for it, people who tried to do their own taxes only to miss multiple tax breaks, and people who just don’t pay their taxes every year.
Mistakes are easy to make, but some are bigger than others. Mistakes can also cost you money or save you money in the long run. So today, I’m going to share the five worst personal tax planning mistakes I’ve ever seen that could save you money if you avoid them.
FILING YOUR TAXES LATE – Whether you procrastinate gathering the necessary paperwork to fill out your taxes or you don’t have the money to pay your taxes, don’t avoid filing your personal taxes on the April deadline. Late filers are not only charged interest, but the IRS also charges a penalty for filing late. Remember, if worse comes to worse, you can always file for an extension.
MISSING INFORMATION – I have reviewed tax forms with all kinds of mistakes on them that have delayed not only receiving a refund check, but in some cases pushed the filing date past the April deadline. Simple things like not adding dependents, bad handwriting or even people forgetting to sign their returns, can keep the IRS from processing your tax return.
MATH ERRORS – This is one of my pet peeves! I am a triple checker when it comes to calculating taxes. Thousands of people make math errors and that’s understandable when you’re doing your own taxes, but your accountant should NEVER make this mistake. If you doubt the numbers, give us a call and we’ll triple check them for you.
OVERPAYING OR UNDERPAYING – This is an easy mistake to make if you don’t know the tax law. Every year, tax credits change and only experts (like us) who keep up with the 70,000 plus page U.S. Tax Code know the ins-and-outs of the complicated laws. You can keep informed on www.irs.gov or just email us.
MISPLACED OR TRASHED TAX RETURN – Don’t you hate those piles of paper all over your office? Well, it’s important to keep your tax return for at least six years. I’ve had clients who have made a mistake on a previous return and I’ve been able to file an amended return and gotten them a refund. But in order to do this, you will need a copy of your return. If you make a mistake, the IRS can also come after you for the six year statute of limitations, but you’ll need your tax return to fight it.
Mistakes don’t happen on purpose, but they can be avoided. I hope some of these mistakes haven’t cost you money. If they have and you need help correcting them, give us a call. Our DM Accounting Team is growing and ready to help!
Have a great week!
