No one likes paying taxes, but making a mistake when filing your return can end up costing you a lot more money in the long run. Here are five of the biggest money mistakes made during tax season, and how to avoid them with the help of an Income tax Consultant in Chembur.
1. Not Filing a Return at All
The first mistake people make is simply not filing a return at all. This can happen for a variety of reasons, including thinking that you don’t make enough money to owe taxes, or not understanding the tax filing process. However, even if you don’t think you owe any taxes, it’s still important to file a return. If you have any income from a job, investments, or other sources, you may be required to file a return. Not doing so can result in penalties and interest charges from the IRS.
2. Filing Incorrectly
Another mistake people make is filing their return incorrectly. This can happen for a variety of reasons, including not understanding the tax forms or misreporting information. Filing your return incorrectly can result in penalties and interest charges from the IRS. It can also delay the processing of your return and result in a refund check that’s smaller than it should be. To avoid this mistake, be sure to review the instructions for each tax form carefully. If you’re not sure how to complete a form, speak with a tax professional or use the IRS’s online tools.
3. Failing to File on Time
The third mistake people make is failing to file their return by the April 15 deadline. This can happen for a variety of reasons, including procrastination or not having all the necessary information. Failing to file your return on time can result in penalties and interest charges from the IRS. It can also delay the processing of your return and result in a smaller refund. To avoid this mistake, be sure to start gathering your tax documents early and file your return as soon as you have all the necessary information.
4. Making Estimated Payments
The fourth mistake people make is making estimated tax payments instead of having taxes withheld from their paycheck. This can happen for a variety of reasons, including being self-employed or having income from investments. Making estimated tax payments can be a good way to avoid owing taxes when you file your return. However, if you don’t make enough estimated payments, you may be subject to penalties and interest charges from the IRS. To avoid this mistake, be sure to make estimated tax payments throughout the year. You can also have taxes withheld from your paycheck if you’re employed.
5. Failing to Keep Good Records
The fifth mistake people make is failing to keep good records of their income and expenses. This can happen for a variety of reasons, including not knowing what records to keep or simply forgetting to save receipts. Failing to keep good records can make it difficult to file your return accurately and can result in a smaller refund. It can also make it difficult to resolve any issues that arise during the tax filing process.
To avoid this mistake, be sure to keep good records of all your income and expenses throughout the year. This will make it easier to file your return accurately and resolve any issues that arise. If you make any of these mistakes during tax season, don’t worry. The best thing to do is learn from your mistake and take steps to avoid making it again in the future. By taking these steps, you can help ensure a successful tax season. You can consult with Income tax Consultant in Chembur.
