Tax season is one of the most stressful times for many people and businesses. It’s a time to get organized and ensure that you have all your documents to avoid owing money or missing deadlines. If you’re feeling overwhelmed, this article will help guide you through some common mistakes people make when filing their taxes and how they can prevent them from happening again!
Not Filing your Voluntary Disclosure Agreement Tax
One of the biggest mistakes people make regarding their taxes is not filing a VDA tax for your business. You may be liable for this tax if you have unreported income or assets. If the IRS catches you, you could face heavy fines and penalties, so it’s important to file the voluntary disclosure agreement tax as soon as possible.
This can result in significant penalties and back taxes owed, so it’s important to take care of this as soon as possible if you’re aware that you haven’t been reporting all your income correctly including expatriate taxes.
A Change in your Marital Status
If you have a change in marital status, it’s important to know that your filing status changes as well. For example, if you get divorced during the year, you must file separately from your former spouse. This could result in having to file both a married filing jointly return and an individual return for yourself. Failing to do so can result in penalties and back taxes owed.
Claiming the Wrong Number of Dependents
Another common mistake is claiming more dependents than you have. This can lead to audits and fines from the IRS. To avoid this, make sure to do your research and claim the correct number of dependents that you qualify for. This will not only help improve your chances of avoiding an audit, but it will also help you save money on your taxes. Make sure to research any credits and exemptions for which you might qualify before filing an extension request with the IRS.
Not Claiming Deductions if You’re Self-Employed or Had More Than One Job
Self-employed individuals and those who had more than one job this year may not be able to claim certain deductions. For example, if you have a home office, you can’t deduct the entire amount of your mortgage payment. You would only be able to deduct a percentage of it. If you’re self-employed or have more than one job, take care to understand how you can and cannot claim deductions as it will help you come tax time. Make sure to research what deductions are available to you and which ones you’re eligible for before filing your taxes.
Filing an Extension Request without Researching Credits and Exemptions
One of the most common reasons people file for an extension is because they don’t think they’ll have enough time to gather all their documents. While this is understandable, it’s important to remember that filing for an extension also gives you more time to research any credits and exemptions you might be eligible for. So make sure to do your homework before submitting your extension request!
Make sure to research any credits and exemptions for which you might qualify before filing an extension request with the IRS. If there are mistakes in your taxes, it may be wise to enter into a Voluntary Disclosure Agreement to avoid penalties. Remember this year not only about what deductions you should claim but also how many dependents you have, as well as if you’ve had any changes in marital status or employment throughout the tax year!