Andrew Klimishyn | January 4, 2018 at 14:08
Home > Blog > Most common tax faux-paus and preparation suggestions:

The holiday season is here and flying by quickly- soon the mood will turn from celebration to perspiration with tax season is upon us. Don’t stress too much, we are here to help with some of the most common tax-season faux-paus and how to prepare for and lessen the burden of tax season.

Most common tax faux-paus and preparation suggestions:         

1.Disorganization: Have you ever just been preoccupied by life and just forgotten about keeping all of your receipts and tax-related material together in one space? Don’t worry, you are definitely not alone! However, it is important to at least dedicate a drawer or safe place to throw all of your related documents. Having a “safe-place” gives you piece of mind and is a very simple, non-time consuming way of organizing your documents for tax season. For those trying to go the extra step, I would suggest organizing receipts by date and type and allocating any extra documentation use simple software such as excel.

2.Form-frenzy: W2s, W4s, and W9s can make your head spin and even shout WTF (What to file!?) Many people, especially those with multiple income sources and assets such as property can accidentally file the wrong forms. A good way to prepare yourself to avoid this mishap is to make a list of your taxable income, interest, dividends, and assets. Below find a simplified chart form guide:

Forms:

Purpose:

W2

Basic Employment Form from your Employer

W9

Independent Contractor Form

W4

Withheld Income Tax Form

1099-MISC

Self-Employment Income Form

1099-B

Brokerage Trades in Bonds and Stocks Form

1099-INT

Interest Form

1099-DIV

Dividends Form

1098

Mortgage Interest Form

1098-E

Student Loan Interest Form

 

3.Credits and Deductions: One of the most exciting parts of tax season is the chance to get some money back and most people achieve this by giving to charity. However, if you do so, it is important to maintain your donation documentation to receive your deductions. As well, be very mindful of tax brackets and how a bracket impacts the real percentage of income tax you pay. 

4.Input errors: In general the tax process and completing forms can rapidly become monotonous. This can lead to simple errors that can have disastrous effects. For example, misspelling or inputting the wrong name or social security number can lead to misfiling and an IRS audit.

Needless to say, due diligence and double checking your work is simple and critical.

5.Math miscalculations: Numbers and equations related to taxes can get a little overwhelming and confusing at times. A helpful tip is to write down all the basic equations you need such as how to deduct a % of a number etc.

Overall, these are just some helpful tips to make your life easier come tax time. Sometimes even the most meticulous individual can make mistakes, so do your “due diligent” and have a second pair of eyes review your return. If you’re pinching pennies this person doesn’t necessarily have to be a professional tax preparer, but someone you trust to confirm your numbers are accurate and you’re ready to file. In conclusion and to lesson your stress:

  1. Keep your documents in a safe place
  2. Organize your paperwork
  3. Know your forms
  4. Know which credits and deductions apply to you
  5. Double and triple check your work and then with a professional or trusted person

Happy Filing!

 

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