The Inside Scoop on Excellence

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The Inside Scoop on Excellence

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3 Ways Living in an Off-Campus Apartment Is More Affordable

3 Ways Living in an Off-Campus Apartment Is More Affordable

Are you a college student trying to decide if it’s time to move into an off-campus apartment? Living in the dorms is great, but it might be costing you more money than you planned for, and it might be time to go out on your […]

Mezzanine Loans: What You Need to Know

Mezzanine Loans: What You Need to Know

According to one study, only 40% of companies will make a 3% return on assets when they expand their company globally. If you think you have what it takes to expand your company, you’ll first need some commercial property loans. That’s where mezzanine loans come in! […]

8 Common Potentially Costly Tax Problems

8 Common Potentially Costly Tax Problems

If there’s one time of the year that no one looks forward to, it’s tax season! We often stress about paying our taxes and filing our forms correctly.

In fact, many Americans spend as much as 4 months just to fulfill our tax burdens!

As a result, it’s imperative that you don’t make any mistakes when paying your taxes. Even the slightest tax errors can lead to harsh financial penalties.

So what are the common tax problems you should avoid? How can you be better prepared for the upcoming tax season?

Here’s what you need to know:

1. Filing Yourself

While many Americans might file their tax forms on their own, this is usually a bad idea. The U.S. Tax Code is one of the most complex and longest in the world. Needless to say, one can expect to make a lot of tax errors!

As such, one cannot expect the average American to understand every rule regarding paying taxes. By filing on your own, you put yourself in jeopardy of accidentally violating one of these rules. 

Regardless of your income bracket, it’s always best to hire a tax lawyer to resolve your tax issues. Hiring an attorney for tax problems will help you file and tackle any IRS discrepancies.

2. Requesting Extensions

As a general rule, you should avoid requesting an extension to file your tax return. These will often come with an extension fee that can become a huge burden.

It’s always best to file on time and make your payment. Even if it’s a partial payment, it might be a better decision than extending.

If you do feel you need to extend your filing, you should always speak to your tax attorneys first. They’ll assess your situation and provide you with the pros and cons of extending your filing.

3. Postponing Your Filing

If you cannot afford your tax burden you may have considered postponing your filing. This is one of the tax errors that many Americans make.

Make sure you file your tax return by the deadline and pay as much as you can. Then you can also request an installment agreement with the IRS for paying off your tax burden.

Postponing your filing will lead to severe tax penalties. Your burden will continue to increase per day.

Even if you make a partial payment on time, you’re showing that you are a responsible taxpayer. By postponing, you’re giving the impression that you wish to evade taxes.

4. Keeping Records of Expenses

If you run a business or are a freelancer, make sure you keep track of every expense. Even the smallest expenses can contribute to greatly lowering your tax burden.

Keep physical receipts of your expenses organized in a folder. You want to also digitize these receipts. Make sure they’re saved on both an external hard drive and a cloud storage server.

At least once per month, you should enter your expenses in a spreadsheet. You’ll depend on deducting these expenses to save your burden on taxes.

5. Proofreading

Once you finish filling out your tax forms, make sure you proofread them as much as possible. Even the slightest tax errors can cause issues for you. 

These issues can mean an audit, a penalty fee, or delaying your tax refund. You want to make sure that the math has been done correctly.

Is your social security number correct? Make sure there aren’t any spelling errors with your name, etc.

Make sure you have your preferred legal address on your tax return. If expecting a refund, make sure your bank account information is up to date.

This is where your tax attorneys will come in handy. Some of the most common tax errors include being “off” by a few dollars or having spelling mistakes!

6. Overpaying

While the IRS is always happy to keep as much of your money as possible, you don’t want to make the mistake of overpaying!

This is where deductions come in. If you forget to include deductions you’ll have a greater tax burden.

Later on, you cannot present your deductions and demand a refund. This has to be completed by the time you file your tax returns.

As tax rates and tax burdens increase, it’s imperative that you understand deductions.

You want to make sure you keep as much of your own money as possible. Many Americans lose much of their wealth simply because they overpay their taxes.

7. Keep Your Tax Records

Make sure you always keep a copy of your tax return before you file. Once again, keep a printed copy in a secure location. You also want several digital copies shared on hard drives, computers, and cloud storage solutions.

In the event that you get audited, you’ll depend on your tax returns to dispute any issues. You should also keep a copy of every letter the IRS sends you. Make sure these are archived and never thrown away.

When you work with a tax lawyer, they’ll ask you for your tax records. If you can’t provide them with all your tax records, there’s little they can do to help you.

8. Choosing Your Tax Code

The final problem is that many Americans don’t choose the tax code that best suits them.

In recent years, we’ve seen Americans moving within the country to districts with more favorable tax laws. Even in high-tax states such as California, you can find different regions with lower city or county taxes.

While most of us cannot avoid taxes, almost all of us can lower our burdens. One of the easiest ways to do this is to choose your tax code by moving to another region.

As such, make sure you research the different tax codes and laws to decide which ones work best for your situation.

Avoid These Tax Problems

Make sure you avoid these tax problems and save yourself from a stressful burden.

Start by keeping detailed records of your income and expenses. Keep printed and digital records of invoices, bills, receipts, etc. 

Next, you want to hire a tax lawyer to help you prepare your returns. They’ll also advise you on how to resolve any tax issues that come your way.

You can find more tips on taxes and business on our website.

How to Choose the Best Bookie Software for Your Online Business

How to Choose the Best Bookie Software for Your Online Business

Have you thought about starting an online bookmaking business? There are many great bookie software options that can help you start your business from the ground-up and scale much faster. These will help you create betting options for any game of your choice. You’ll then be […]

6 Impressive Benefits of Plants in Your Home

6 Impressive Benefits of Plants in Your Home

Have you heard of horticultural therapy? Using plants and gardening, horticultural therapy is a professional approach towards improving patients’ physical and mental health. However, while it may sound like a new type of therapy, the practice of using plants to make life better dates back […]