As the end of the year approaches, we look forward to the holidays, New Year’s Eve parties, and spending some quality time with the loved ones. Not everything is joyful during this period. With the calendar counting down its final days, it’s time to start thinking about taxes.
This is one of the most stressful periods of the year, If not the most, with all the deadlines, constant headaches, and sleepless nights. A tiny mistake when filling out your taxes can culminate in a dispute with the IRS. Here are a couple of tips and tricks to help you prevent any unnecessary oversights, and tackle the numbers with a calm head.
Before sending away any forms, take your time to reread the information you entered. It might seem like an obvious thing, but many people lose their patience in the final moments of data entry. If they complete their documentation with only moments to spare before the deadline, mistakes are likely to happen.
Before sending any documents to the IRS, make a copy of those papers. They might ask you to confirm some information due to some confusion around missing papers. By keeping copies, you will spare yourself having to submit your forms again.
Start on Time
An essential part of tax filing is timing. The IRS imposes hefty penalties for those who do not manage to meet their deadlines. Some of the penalties include:
- An interest rate of around 5% for not paying the tax bill by April
- The IRS has the right to impose a monthly late-payment penalty starting at 0.5%
- The late filing penalty for not filing the tax return begins at 5% and can rise to 25%
DIY or Hiring a Pro?
Hiring an accountant to do your taxes for you might relieve you of the responsibility, but these services have a price attached to them. Before you start deducting their fees from your budget, ask yourself if you actually need help in the first place.
Due to the availability of various software, doing taxes has never been easier. A layperson can learn the basics. If your total income comes from one employer, then you need no assistance – only patience to master the program.
If you are a business owner or don’t understand the forms in front of you, don’t be too shy to ask for help. For more complicated financial issues, reach out to a tax lawyer. Firms like Rotfleisch & Samulovitch specialize in tax planning for both businesses and individual needs.
Take Advantage of Free Help
The IRS has a free-of-charge tax aid program for people with disabilities, people above the age of 65, and those who make less than $54,000 annually. The program is called Volunteer Income Tax Assistance (VITA), and if you fall into one of these categories, or know someone who does, reach out to them.
And Now, Filing
Tax filing feels like an unnecessarily complicated process. We need to avoid small mistakes like sending out files with missing or wrong information. Before you send anything to the IRS, make sure your review it first, and remember to make a copy for your own records.
Submitting our taxes on time is crucial, as not meeting these strict deadlines results in penalties of up to 25%. If you need help with planning or are financially responsible for a business, seek the advice of a tax lawyer or accountant.