4 mistakes to avoid when filing for tax refunds
The Internal Revenue Service, or IRS, is the governing authority that processes tax returns filed by individuals and businesses and issues refunds. The IRS has issued sizeable refunds worth thousands of dollars in recent years. Individuals can use the money to meet daily expenses and pay pending bills. But to be eligible for prompt refunds, here are some common mistakes you should avoid while filing your tax returns this year.
Updating the wrong filing status
The IRS lets you file as a single taxpayer, a married taxpayer filing jointly/separately, a qualifying widow/widower, or a sole head of the household. Entering this information correctly is critical while updating the return. Filing under the wrong section can delay processing and refunds. You might even be subject to penalties if there are errors in the calculation.
Not reporting all taxable income
Salaried employees working for an organization should properly mention any income subject to taxes on Form W-2. Freelancers can report their income using Form 1099. Different kinds of employment and earnings are subject to different tax slabs. The bottom line is that you should never underreport your earned income in the said financial year. If the IRS notes discrepancies, it can order an audit that will lead to subsequent penalties and interest.
Filing late or on the due date
Do not wait till the last minute to file your tax returns. Doing so can lead to errors and omissions, which you might be unable to rectify. Filing early allows the IRS to verify and check the refund status. If there are any irregularities, you will have time to deal with the rectifications and receive the eligible refund.
Not taking expert advice
Always consult with a professional if unsure about claiming deductions, arithmetical calculations, and even jargon mentioned in the tax forms. Tax attorneys file returns day in and day out and are thus in a better position to claim all the eligible refunds for your return. Moreover, they use professional software to calculate the amounts and ensure claims are placed under the correct subcategory. With the help of experts, the chances of errors and omissions are significantly minimized.
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