Title: 4 Common Tax Mistakes You’re Making & How to Avoid Them
No one wants to mess up their taxes, but it’s easy to do. Especially if you’re trying to file for bankruptcy on your own. Taxes can be confusing, and it’s easy to make a mistake without realizing it. If you’re not careful, you could end up owing the IRS a lot of money.
In this blog post, we will discuss four common tax mistakes that people often make. We will also provide tips on how to avoid making these mistakes. So if you want to ensure that you are filing your taxes correctly, read on!
1. Not keeping track of your deductions
The start of a new year is a great time to get your finances in order. If you’re not careful, you might be leaving money on the table by not taking advantage of all the deductions available to you.
Here are tips to help make sure you’re getting the most out of your tax return this year.
- Keep track of your charitable donations. Make sure to keep documentation of any donations made throughout the year, whether it’s cash or goods. This can include receipts, donation letters, or canceled checks.
- Know what deductions you’re eligible for. There are a number of deductions that many people don’t know they’re eligible for, such as moving expenses and job-hunting costs. Be sure to find out what you’re allowed to deduct and keep track of those expenses.
- Track your medical expenses. If you have a lot of medical bills, you may be able to deduct them from your taxes. Keep track of all receipts and documentation related to your medical expenses throughout the year.
2. Not tracking your expenses throughout the year
Are you one of those people that only track their expenses at the end of the year when they’re doing their taxes? If so, you’re not alone. A lot of people only think about their finances when they have to. But if you want to be successful with your money, you need to be more proactive. The best way to do that is by tracking your expenses throughout the year. That way, you can identify any areas where you might be overspending and make adjustments accordingly.
3. Not reporting all your income
It’s no secret that the IRS likes to get its mitts on as much money as possible. So, it might surprise you to know that many people deliberately underreport their income on their tax returns each year. In some cases, this is done in an attempt to avoid paying taxes on all of their income. But, in other cases, it’s simply because people don’t know they’re supposed to report all of their income. No matter why you might choose not to report all your income, it’s important to know that there are risks associated with doing so. In addition to potentially getting audited by the IRS, you could also be subject to penalties and interest charges.
4. Filing taxes late or not at all
There are a lot of reasons why people might not file their taxes on time or decide not to file them at all. But whatever the reason, it’s essential to know that there are consequences for both actions. Filing taxes late can result in fees and penalties, while not filing taxes can lead to fines and even jail time. So if you’re considering filing your taxes late or not at all, be sure to reach out to a bankruptcy lawyer from Eric Lindh Foster Law, LLC.