It’s that time of the year again. Antacids are selling out, pencils are being sharpened, calculators are being poked… it’s time to do your taxes. But before you start doing the math, take a moment to refresh your knowledge of taxes with these income tax tips.
If you’d like to speak with a Charles Krengel, P.A. representative today, call us at (800) 892-9631 or click here to get a FAST, FREE consultation!
Don’t Panic
First, the worst thing you can do is completely freak out about your taxes. Even if it’s close to the filing date, if you can file electronically or simply lose an hour of sleep getting your forms filled out, you will be able to file your taxes. All you’re doing by overreacting is making a difficult process that much harder. So, step back, take a breath, and then get to work.
But Don’t Wait, Either
Many of us hear that if a tax return is postmarked or electronically filed on April 15th, that means their return has been filed on time. But that also means a train wreck at the IRS as millions of taxpayers race to get their returns filed and their taxes paid off. If you file paper returns, your return might slip through the cracks, and it can be weeks or months before that issue is resolved. Make sure you use certified mail when filing paper returns in order to provide proof of filing if the IRS does not receive your returns.
Credits And Deductions: Know the Difference
Many tax tips will tell you to take this credit, or this deduction, but they won’t explain the difference between the two, and that’s often more important. A deduction is something you can take out of your overall taxable income, while a credit is something that shaves money off your federal tax dollar for dollar when you finish your return. You shouldn’t take one or the other because it’s a bigger number; actually do the math and ask yourself what you benefit from by taking this deduction.
Can’t Pay? File Anyway
Unfortunately, some of us will owe the IRS money we just don’t have. But here’s something you may not have considered; failing to file, even if you can’t pay what you owe, will mean you’re exposed to a failure to file penalty of 5% per month up to a total penalty of 25%. If you can’t pay what you owe to the IRS, get your return filed and then call them to discuss payment options; it is much better to file timely in order to avoid an unnecessary late filing penalty.
If you’d like to speak with a Charles Krengel, P.A. representative today, call us at (800) 892-9631 or click here to get a FAST, FREE consultation!
The Best Tax Return Is In The Details
Many tax tips will tell you to take this or that deduction, but most of them don’t tell you about the little stuff. Here’s a question, especially if you decide to itemize deductions: Did you add up your unreimbursed mileage for this year? A tax form is full of little deductions and other items that you can add onto your total and reduce your overall taxable income. Yes, the little things seem like just that, little. But if you pick up a hundred pennies, you suddenly have a dollar, and it’s that same patience that will ensure you get the best possible return.
