With tax time being right around the corner, you are probably really dreading it. Not many people look forward to taxes unless they are getting money back of course. There are many tax mistakes that you may be making.
Not telling the truth on your tax return.
When doing your taxes, always be truthful about EVERYTHING. Also, keep proof of everything as well, such as receipts. It is better to be safe than sorry.
Being audited is never a fun time, and I can only imagine that it is even less fun when they find out that you lied about 100 things so that you could possibly pay less in taxes.
Keeping bad records.
Do you ever guess the amounts of your tax return? Maybe you never keep receipts and you guess on everything. This is a mistake! You should keep good records of as much as you can. It is not that hard. Buy a folder and file everything that you need for tax time into this folder.
Not paying any taxes.
Some try to completely avoid paying any taxes by not submitting their tax returns at all. This is never a good idea. There is probably proof somewhere out there that someone paid you money, so you should always be honest. Set aside money as you make it so that tax time isn’t as painful.
Getting too much back.
When I was in college, I remember my accounting professor telling us that he received over $6,000 back for his tax refund. At the time, I was probably 18 or 19 and thought that was amazing. However, these days, I wonder why this guy was even an accounting professor because I really do not think he knew what he was doing.
If you are getting too much back, then you are doing your taxes wrong probably. You should be working towards getting your tax amount towards $0 so that you don’t owe money at tax time and so that you are not getting money back as well. Why should you give an interest free loan to the government anyways?
Doing your taxes yourself when you have no clue what you are doing.
Yes, many people manually do their taxes each year. However, if you have no clue what you are doing, then this is probably a huge mistake. Tax software is cheap these days, and you may even save money using an accountant because they might be able to find you money that you are missing out on.
What tax mistakes have you seen?