Question 1: What Are Some Of The Most Common Tax Mistakes?
“Taxpayers often miss, legitimate tax deductions,” says Rosen. Here are some she recommends that taxpayers look into:
- Medical expenses: This can include travel costs for getting to and from medical care, health insurance premiums and health care costs for your dependents.
- Higher education costs: “You may be able receive tax money back for tuition expenses,” says Rosen.
- Home purchase or sale fees: Look over your closing papers to find deductible expenses from buying or selling a home. This can apply to refinancing also.
- Self-employment costs: You may be able to take deductions for your home office, your mileage and your start-up costs.
Question 2: When Should I File?
“Do not wait until the last minute to see your tax preparer,” counsels Rosen. Rushing just before tax day is a common reason why people miss out on deductions for which they are eligible. Also, the longer you wait, the busier and more tired your preparer will be, and that makes mistakes more likely to happen.
Plus, if you act early, you will have plenty of time to make sure all loose ends are tied up. Missing a few documents? It’s no big deal if you haven’t waited until the last minute.
As an added incentive, Rosen counsels, “Scam artists can steal your Social Security number, so the earlier you file, the less chance of having your identity stolen.”
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Question 3: What Should I Take When I Visit My Tax Preparer?
If you are using the same tax preparer as last year, he or she may have your 2013 return on file, if not make sure to bring a copy. Rosen explains, “There are often carryover losses on your return from 2013 that carry over to 2014 and/or deductible expenses.” You should gather together all of the mortgage interest statements, W2 forms and 1099 forms that you have received.
Do your homework before the appointment. Reviewing your previous year’s return can help you make sure you have all of the paperwork that you need. You can also total up your deductible expenses.
Question 4: How Can I Prepare For Tax Season All Year Long?
Tax time comes once a year, but it shouldn’t be at the back of your mind the other 364 days of the year. Rosen advises, “Think taxes all year.” Find a system that works for you for tracking your deductible expenses and keep up with it. You can use an electronic method on the computer or file receipts in categorized envelopes.
Question 5: Why Should I E-File?
“When you file electronically your return passes accuracy checks and any problem areas are more easily identified,” shares Rosen. In case that’s not enough motivation for you, she adds, “You will also get your refund faster!” In fact, your refund can be deposited directly into your bank account.
Question 6: What Should I Do If I Owe?
Unfortunately, even if you claim every deduction for which you qualify, you may still need to pay. In this case, Rosen counsels, “Try to pay what you owe at April 15. It is expensive to borrow from the government. If you do need a loan from the IRS to pay your taxes, you can set up an installment agreement by filing Form 9465.”
Meghan Ross is a freelance writer covering all things home and living. Her work can be found on Examiner.com.