Common Mistakes Encountered When Filing Taxes
Every citizen is obliged to pay taxes to their government. Taxes collected from individuals and business organizations are channeled into development projects to better the lives of citizens. Being a statutory requirement, failure to file taxes or improper filing of taxes could result in a criminal offense. Different bodies have been tasked with the responsibility of collecting taxes on behalf of governments. For the United States, it is the Internal Revenue Service (IRS). The IRS enforces the federal tax laws to ensure every citizen is tax compliant. Several regulations have been set by the IRS to facilitate efficient tax collection. Taxpayers are required to follow the regulations to remain tax compliant; failure to which, one might be prosecuted and charged.
Mistakes people make when filing taxes.
Missing deadlines- As a taxpayer, one is likely to miss deadlines if they have a lot of work and tight schedules to follow. According to the IRS, the most missed deadlines are for individual tax filing. Unlike companies, individuals without accountants or tax assistants find it hard to file their taxes on time. This results in additional expenses as penalties that are charged for late filing. The IRS requires that taxes be filed by April 15th. The deadline is usually postponed if it falls on a weekend or on a public holiday. Meeting the tax deadline depends on what method one chooses to file taxes. When filing taxes electronically, one has up to before midnight on April 15th. For physical filing using U.S mail, the returns should be postmarked on April 15th. However, some post offices work till late tax deadline day.
Misinterpreting tax limits- There are several exemptions when filing taxes; these depend on age, filing status, and nature of income. For instance, individuals under 65 years with an income of less than $10,350 a year are exempted from filing taxes under the federal tax laws. Although people are exempted from filing taxes, tax experts advise that individuals should file as instructed then see what their bottom line could be. When one is exempted from filing taxes, one can claim a tax refund from the IRS. Claiming tax refunds in the modern-day could take longer as more stringent policies have been set to curb tax fraud. Normally, the IRS issues tax refunds within 21 days after receipt of the tax filings. In case of suspicions of tax fraud or identity theft, tax refunds could take up to a year for efficient investigations.
Poor record-keeping- Record keeping is one of the essential elements when filing returns. A clear record of finances throughout the year makes it easy to determine how much one should pay in taxes. Receipts and other payment documents justify deductions that one has incurred throughout the year; these could be business expenses or charitable donations. After filing returns, one should keep the tax records for at least three years. When being audited, you are required to provide tax information for up to three years back. In case of suspicions of tax fraud, returns of up to seven years back are required for investigations.
Why tax experts are important when filing taxes
Tax experts play an essential role in easing the tax filing process for individuals and business organizations. Contracting a tax expert eliminates common mistakes one is likely to make while filing returns.
SIMPLETAX is a trusted firm of professionals with knowledge and skills in all tax-related matters. The firm provides services such as individual and company tax preparations and filing. You stand a higher chance of success when claiming tax refunds with the help of SIMPLETAX.
Income tracking services offered by SIMPLETAX ensure individuals and business organizations file the required amount of tax. The firm tracks all cash flows and categorizes them accordingly to give a clear view of productivity. Bookkeeping is essential for tracking business progress; it makes it easy to project the future of the business and the potential tax bracket the business will belong to. When offered by trusted firms such as SIMPLETAX, bookkeeping provides essential and accurate information for auditing and investigations in case of suspicions of tax malpractice. Tax experts with adequate experience can prepare and file taxes accurately within the required time limits. This eliminates the possibility of incurring additional expenses due to penalties associated with late filing.
