The holiday decorations are coming down and your new year’s resolution set. Now, the next mission is getting your tax information together so you can file.
Many Americans choose to prepare and file their own taxes each year. In 2018, about 43% of Americans filed their own taxes without the aid of a tax professional.
But how do you know you’re doing it right? What if you mess up and owe a ton of money to the IRS?
We’ve got you covered! Keep reading to learn all about the top 4 tax problems to avoid this tax season.
Keeping No Business Expense Records
If you own and operate your own business, you’ll know all about the benefits of deductions. But, you need to keep detailed records about everything you spent money on for your business.
The more items you have receipts for, the more tax deductions you get at the end. If you don’t keep your records, you could screw yourself out of some serious tax savings!
Adjust Your Withholding Amount
In 2018, the tax overhaul changed the way we calculate withholdings. Since tax brackets have changed a little, you may want to look at it again.
The intention behind the new tax brackets is to help put money back into the pockets of middle-income families and individuals. If you’ve gone all year underreporting though, you could end up with a hefty bill at the end of the year.
Tax Problems With Your Side Hustle
These days it seems like everyone has a second or third job on the side to help bring in more money. Many times, these are freelance or independent contractor situations and your payment will not have any taxes deducted.
But, that doesn’t mean you don’t need to pay taxes! The last thing you want is an audit and/or the need to hire an IRS tax lawyer to help you sort out a mess.
Seek Help Sooner Rather Than Later
One major mistake many people make is attempting to prepare their own taxes then getting stuck and asking for help too late. Instead, try to ask for help early on if you’re at all unsure about what you’re doing.
Tax professionals get busier and busier leading up to the tax deadline. If you wait too long, you could have to wait several hours or days to get an appointment with your tax professional.
The Only Guarantees in Life Are Death and Taxes
Most people can prepare their own taxes if they do a little research and take their time to fill out the information right. If you have super simple taxes, why spend money on a professional to file for you?
If you’re going to tackle your taxes by yourself this year, keep your eyes peeled. Reference this list as you go to make sure you thwart any of these issues before submitting your forms.
We hope you enjoyed reading this article and that you learned a few of the tax problems to avoid this tax season. For more great articles about finance, business, law, and more, check out the rest of our blog today!