Avoid These 7 Tax Season Missteps
Avoid These 7 Tax Season Missteps
Tax season is here, and with it comes the temptation to fall into some classic tax-filing traps. Some mistakes might delay your refund, while others could trigger an unfortunate letter from the IRS (yikes). But fear not! We’re here to help you.
1. Procrastination (a.k.a. “I’ll Do It Later”)
We get it—filing taxes isn’t exactly a thrill ride. But waiting until April 14 to start gathering your documents is like trying to cram a semester’s worth of studying into one night. It leads to stress, mistakes, and possibly missing out on deductions because you rushed.
Solution:
Start early! Even if you don’t file right away, gathering your documents ahead of time will make the process much smoother.
2. Ignoring Your Mail (or Email)
Your W-2s, 1099s, and other important tax documents are not just random pieces of paper. They hold the key to an accurate tax return. Tossing them in a pile (or worse, deleting that email from your employer) is a recipe for disaster.
Solution:
Create a designated folder (physical, digital or both) to store all your tax forms. That way, everything is ready to go.
3. Guessing Your Numbers
Filing taxes is not the time for ballpark estimates. “I think I made around $50,000” won’t cut it. The IRS already has copies of your official forms, so any discrepancies could cause delays or even an audit.
Solution:
Always refer to the actual forms provided by your employer, bank, or other income sources. Precision matters!
4. Forgetting Deductions & Credits
If tax deductions were a buffet, would you walk away with just a salad? No way! There are plenty of deductions and credits that can reduce your tax bill (or boost your refund), but many people overlook them or don’t provide all of the documentation to take advantage of them.
Solution:
Make sure to provide all of your tax documents to your filing professional.
5. Not Providing Accurate Information
Don’t let all that effort go to waste by providing the wrong Social Security number or bank details. This is why most tax filing professionals require documentation from filers.
Solution:
Ensure everything is accurate on all of your documents – SSNs, and direct deposit info.
6. Ignoring Your Side Hustle Income
Freelance gigs, Etsy shops, and Venmo payments might seem like “bonus” money, but the IRS sees them as taxable income. Failing to report them could result in penalties down the road.
Solution:
Keep track of all income sources throughout the year and report them honestly. If you earn over $600 from a client, they’ll likely send you a 1099-NEC—and the IRS gets a copy, too.
7. Thinking an Extension = More Time to Pay
Filing for a tax extension can give you extra time to file, but not extra time to pay. If you owe money, interest and penalties will start adding up after the deadline, even if you got an extension.
Solution:
If you need more time, estimate your tax bill and pay at least part of it by the deadline to minimize penalties.
Avoid the Stress, Reap the Rewards
Tax season doesn’t have to be painful. By staying organized, filing on time, and avoiding these common mistakes, you can make the process much easier—and maybe even get a refund as a reward for your efforts!