If you shudder at the thought of doing your taxes, you’re not alone. A 2018 study revealed that 9 in 10 Americans feared to file their income taxes incorrectly.
However, tax season is nothing to fear. There are ways you can make doing your taxes a breeze. In this guide, we will show you how to get the most out of taxes.
Don’t Forget to Claim Deductions
Don’t hesitate to claim all the deductions that are available to you. Some of the most common deductions include medical costs, charitable donations, and business expenses.
How do deductions work? They are subtracted from your adjusted gross income which lowers your taxable income — thus lowers the amount of taxes you owe. Also, the fewer taxes you owe, the larger the refund.
Before you go claiming expenses, make sure you have receipts so you can itemize your deductions. Also, if you’re claiming charitable donations make sure that the organizations have tax-exempt status with the IRS.
Report All of Your Income
One mistake that many taxpayers make is underreporting their income. Even if this is unintentional, the consequences can be costly. Unreporting your income on your taxes can result in interest and penalties for unpaid taxes.
A common error that many people make is forgetting to include 1099 or contract work. Therefore, take your time and review your return to see if there are any sources of income you are forgetting.
Federal returns for 2019 are due April 15, 2020. If you don’t file your return on time, you will owe interest and maybe even have to pay penalty fees too.
The failure-to-pay penalty is 5% of the unpaid tax balance each month the return is late. Also, if you don’t file and were owed a refund you will still have to pay penalties.
If you need extra time to file your taxes, you can also file an extension. Though, an extension does not give you more time to pay.
It’s crucial to pay as much as you can before the April 15th deadline. The failure to pay penalty is 0.5% of your unpaid taxes each month.
Triple Check Your Math
It’s obvious that you should make sure that all of your numbers are correct. But entering the wrong numbers on your return can be costly.
When you’re calculating your income make sure to triple check to make sure all of the numbers are correct. You can use online accounting programs like TaxSlayer or TurboTax.
You can even go the old fashioned route and use a calculator. Tools like iCalculator make checking the numbers on your return easy.
Don’t Forget to Sign Your Return
While focusing on preparing your return and double-checking information, it can be easy to forget to sign your return. Not doing this could slow down the processing of your return.
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