4 Common Tax Mistakes

March 26, 2021

As you prepare to file your taxes, it’s important to learn about common errors that create problems with the state government and the IRS. Rather than dealing with unaccepted tax returns and creating more work for yourself, review what your accountant service in Los Angeles wants you to keep in mind. 

Miscalculations

Bad math” can quickly result in calculations that result in incorrect tax filings. Whether the issue stems from incorrect arithmetic or transfer figures, you could possibly face an audit. Use tax software or rely on certified accountants to do the math for you and eliminate the possibility of these errors. 

Not Including Applicable Deductions

No matter what you do for a living, you need to know what tax deductions apply to you. If you operate a commercial farm, for example, you can write off all farming supplies and equipment among other things. If you work as an independent contractor, deductions include your home office, portions of your internet and utility bills, equipment purchases and depreciation, and Paypal fees. Know exactly what deductions you can utilize to avoid paying more in income taxes. 

Incorrect Contact Information

A missing or inaccurate Social Security Number, misspelled name or address, and incorrect bank numbers create problems for the IRS and for you. Double-check everything for accuracy or work with your Encino tax consultations to ensure you didn’t miss anything. They will also make certain you select the right filing status, such as single, head of household, married filing separately, married filing jointed, and qualified widow(er). 

Forgetting About Necessary Paperwork

By utilizing all necessary paperwork, you’ll get your return that much sooner, especially if you file early. Keep all of your documents in one folder for easy reference, such as your student loan interest document, health insurance document, charitable donation receipts, new investment account information, and school tuition documents. If you work as an independent contractor, you’ll need all of your 1099s before you can file. Should some of your clients claim your services as write-offs, simply ask how much you earned during the tax year. 
Avoid these and other tax errors by working with Wallace & Associates, your Los Angeles accounting firm.