Tax Preparation: What Not to Do
Tax preparation can be a complicated process, filled with potential pitfalls. Making mistakes during the tax filing process can not only lead to costly fines and additional fees but also involve other penalties such as criminal charges if you intentionally evade taxes. To ensure that your return is accurate and complete, it’s important to know what not to do when preparing your taxes and hiring a reputable tax service.
Avoid Filing Late
The most important thing to do when it comes to filing taxes is to ensure that you get them done on time. The Internal Revenue Service (IRS) imposes a late-filing penalty of 5% of the unpaid taxes for each month, or partial month, after the due date up to 25%. To avoid any additional fees and penalties, make sure you file your taxes before the deadline.
Don’t Omit Income
When filing taxes, make sure that all of your income is accurately reported on the return, including wages paid by employers and any other sources of income such as self-employment earnings or investment profits. Failure to report all of your income can result in a variety of penalties, including fines and interest on the amount due.
Don’t Claim Ineligible Expenses
When claiming deductions for items such as charitable donations or medical expenses, it is important to make sure that they are eligible according to the IRS rules. For example, any charitable donations must be made to an organization that is recognized by the IRS. Additionally, only certain medical expenses are deductible and must be documented in order to be claimed.
Don’t Sign an Uncompleted Return
Before signing your tax return, check it carefully for any errors or omissions and make sure that all the information is accurate. If something isn’t right, don’t sign the return until it’s corrected. Signing an incomplete or inaccurate return can lead to a variety of penalties, such as a $5,000 fine for fraud and up to five years in prison.
Tax preparation is a complicated process that requires careful attention to detail and an understanding of the rules and regulations set by the IRS. To ensure that your return is accurate and complete, make sure to avoid these common mistakes and always double-check your work before filing. Mifra Financial offers a reliable tax service in Sylmar, CA. For inquiries, get in touch today by calling (818) 356-6879.