Most people make the same tax mistakes when filing their taxes. This can lead to missed deductions, overpaying your taxes, and other financial headaches says Aron Govil. In order to avoid these costly mistakes, it is important to be aware of what they are.
Here are the most common tax mistakes people make:
1. Not reporting all of your income
2. Not taking deductions and credits that you qualify for
3. Filing your taxes late
4. Filing your taxes incorrectly
5. Failing to plan ahead
Not Reporting All of Your Income:
One of the most common tax mistakes is not reporting all of your income. This can lead to an audit and may result in you owing money to the IRS. It is important to report all of your income, including wages, self-employment income, interest, dividends, and capital gains.
Not Taking Deductions and Credits That You Qualify For:
Another common mistake is not taking advantage of available deductions and credits. There are a number of deductions and credits that people may be eligible for but don’t take because they don’t know about them or they don’t think they qualify says Aron Govil. Some of the most common deductions and credits include the student loan interest deduction, the child tax credit, and the Earned Income Tax Credit.
Filing Your Taxes Late:
Filing your taxes late can result in penalties and interest from the IRS. If you are unable to file your taxes on time, you should file for an extension. This will give you an extra six months to file your taxes.
Filing Your Taxes Incorrectly:
Another common mistake is filing your taxes incorrectly. This can lead to missed deductions, overpaying your taxes, and other financial headaches. It is important to be aware of what you are doing when you file your taxes and to double-check your work.
Failing to Plan Ahead:
One of the biggest mistakes people make when it comes to their taxes is not planning ahead. This can lead to missed deductions, overpaying your taxes, and other financial headaches. It is important to know what you are eligible for and to plan ahead so that you can take advantage of as many deductions and credits as possible.
By avoiding these common tax mistakes, you can save yourself time and money explains Aron Govil. To learn more about these mistakes and how to avoid them, consult a tax professional.
FAQs:
Q: I didn’t report all of my income on my last tax return. What should I do?
A: You should report all of your income on your next tax return. This includes wages, self-employment income, interest, dividends, and capital gains. Reporting all of your income is important because it can help you avoid an audit from the IRS.
Q: I didn’t take any deductions or credits on my last tax return. Should I take them this year?
A: You may be eligible for a number of deductions and credits, including the student loan interest deduction, the child tax credit, and the Earned Income Tax Credit. It is important to take advantage of available deductions and credits, especially if you qualify for them.
Q: I filed my taxes late last year. What should I do this year?
A: If you are unable to file your taxes on time, you should file for an extension. This will give you an extra six months to file your taxes.
Q: I’m not sure how to file my taxes. What should I do?
A: You can file your taxes yourself using tax software or you can hire a tax professional to help you. It is important to be aware of what you are doing when you file your taxes and to double-check your work.
Q: I didn’t plan ahead last year and missed some deductions. What can I do this year?
A: You can plan ahead this year and take advantage of available deductions says Aron Govil. There are a number of deductions that you may be eligible for, so it is important to know what they are. You can also consult a tax professional for help.
Conclusion:
The most common tax mistakes include not reporting all of your income, not taking deductions and credits that you qualify for, filing your taxes late, filing your taxes incorrectly, and failing to plan ahead. Avoiding these mistakes can save you time and money. To learn more about them, consult a tax professional.