Last Updated on Feb 28, 2020 by James W
Governing bodies require employees and businesses to file tax returns and this is mandatory for them. It is proper to adhere to this lest you are caught up with legal issues and sometimes termination or business. While this is true, there are some people who still make mistakes when it comes to filing of income tax like:
1. When you ignore your accountant – With so many accounting services offered online including software, there is the tendency to ignore the accountant. They are conveniently remembered when the tax day is around the corner. This brings with it a lot of stress because the accountant would have to deal with entire year’s transactions in a limited time frame.
2. Arriving late for the tax season – Many people start preparing late to file their tax returns. The tax process is a yearlong effort and not confined to a few weeks prior to the deadline date.
3. When you ignore tax laws – Ignorance of the law is no excuse. You need not be an expert on tax laws but you can also avoid unnecessary expenses and take advantage of beneficial changes. Leave the tax headaches to the accountants.
4. Wrongful deductions or none at all – This can easily subject you to an audit. Input the right deductions and don’t overlook out of pocket expenses, depreciation or car expenditure. These are quite easily forgotten.
5. Not keeping your finances up to date – Procrastination will cost you. In today’s world, there are many mobile applications that can help you capture and record receipts immediately you are through with a transaction. This prevents the stress of last minute rushes and your accountant has a fun field day preparing your income tax report.
If you choose to hire income tax services, take note and ensure that:
1. The company has the prerequisite papers. This would be the tax identification number if you are in the U.S.A. So confirm that the preparer is properly licensed.
2. Study the contract and be sure of what the service will cost you, what is covered and what may change if the returns are complicated.
3. Be cautious and counter check your tax returns to make sure it is accurate.
4. Sign the tax return and ensure you do not sign a blank or incomplete form.
5. Always keep a copy of the tax return.
6. Ensure that it is your bank account number on the return to receive the refund.
7. Request an e-file.
8. Check availability of the tax return service provider. Some may go missing once the deal is done.