Tax season can be stressful, and many people make common mistakes when filing their taxes. These mistakes can lead to delays, fines, or missed opportunities to save money. No matter how many times you’ve filed your taxes before or if this is your first time, knowing the most common mistakes and how to avoid them can make the process go more smoothly. If you hire a professional accounting San Antonio to help you with your taxes, you can be sure that they will be filed correctly and on time. These are five common tax mistakes that people make, and a tax preparer can help you avoid them.
1. Filing with Incorrect or Missing Information
One of the most frequent mistakes people make when filing taxes is submitting incorrect or incomplete information. This can include errors in personal details, such as Social Security numbers, bank account information for direct deposit, or missing income sources. If the IRS needs to call you to make changes, even small mistakes can cause delays or fines.
How Professional Tax Preparation Helps: A professional accountant in San Antonio is highly skilled at ensuring all your details are correct. They will carefully review your documents to verify your personal and financial information, reducing the likelihood of mistakes. Additionally, tax preparers ensure that all necessary forms, such as W-2s, 1099s, and other income statements, are included in your tax return.
2. Failing to Claim All Eligible Deductions
Many taxpayers overlook potential deductions that could reduce their taxable income. Interest on school loans, medical bills, mortgage interest, and donations to charity are all common things that people deduct. In some cases, taxpayers may not even be aware that they are eligible for certain deductions, which can result in them paying more than necessary.
How Professional Tax Preparation Helps: Professional tax preparers are well-versed in the latest tax laws and deductions available to you. They are capable of identifying opportunities you might miss, such as lesser-known credits or deductions, and ensuring that you’re not overpaying. A tax professional can also help you understand whether itemizing your deductions is more beneficial than taking the standard deduction, depending on your financial situation.
3. Incorrectly Reporting Income
Taxpayers sometimes fail to report all their sources of income, whether intentionally or accidentally. This can include freelance work, side jobs, or investment earnings, which might not be included on official W-2 forms. Underreporting income can lead to serious consequences, including penalties, additional taxes owed, or even an audit.
How Professional Tax Preparation Helps: A tax professional can help you accurately report all your income sources. If you’re self-employed or have various income streams, a professional accountant in San Antonio can guide you through how to report them correctly. They will also help you understand which deductions can offset income from freelance work or investments, ensuring that you don’t overpay.
4. Filing with the Wrong Filing Status
Choosing the wrong filing status is a mistake many people make, especially if they have changed their personal situation over the past year. Your tax rate and credit eligibility depend on your filing status, not on whether you’re married, separated, or living apart. You might pay more taxes than you need to or miss out on important tax credits if you file under the wrong status.
How Professional Tax Preparation Helps: A tax professional will assess your personal situation and advise you on the correct filing status. For instance, if you are recently married or divorced, they can ensure you select the most advantageous filing status to reduce your tax liability. Additionally, they can help you navigate complex situations, such as qualifying for “head of household” status, which offers higher deductions.
5. Not Keeping Proper Documentation
Taxpayers often fail to keep proper documentation of expenses or deductions, which can result in errors on their tax returns. The IRS needs specific proof for a lot of claims, like tax breaks for businesses, medical bills, and gifts to charity. If you don’t keep good records, you might not be able to get discounts, and your taxes will go up.
How Professional Tax Preparation Helps: When you work with a professional accountant, they can guide you on the proper records to keep and ensure that your expenses are well-documented. Tax professionals can also help you organize your receipts, invoices, and other supporting documents, which are crucial if the IRS requests verification. They can also advise on what to do if you’ve already filed and need to amend your return due to missing information or receipts.
Conclusion
Filing your taxes can be complicated, and mistakes are easy to make—especially when it comes to understanding deductions, income reporting, and selecting the correct filing status. However, with the help of professional tax preparation, many of these common mistakes can be avoided. If you hire an accountant in San Antonio, they will make sure that your tax return is filled out correctly so you don’t make any mistakes that will cost you money or miss out on chances to save money. Whether you’re filing for the first time or need assistance with a complicated return, professional tax preparation is an investment that can save you both time and money, giving you peace of mind during tax season.
