TEN COMMON TAX MISTAKES (PART TWO)
Today we get to the remaining most common tax mistakes:
6. Under withholding – Common and costly, under withholding sometimes occurs with very little tax payer changes. If you are uncertain on your amount owed, attempt to confirm you have at least paid in 110% of your prior years taxes as this will help you avoid penalties.
7. Not filing soon after extension – Even though an extension is easy to file, if you owe taxes the extension does not stop penalties. Thus, it is always a good idea to file soon after your extension in order to lessen those penalties.
8. Forgetting to carry over losses – Losses from prior years are often left out and the tax payer doesn’t receive full benefit. Be sure to carry those losses forward.
9. Filing too quickly – Some people actually file too soon and then receive a corrected statement of some type. Completing your taxes in late February is fine, but it might be best to wait until late March.
10. Missing Interest – Perhaps the most common mistake is to miss interest on a tax return. This is caused by an incorrect address change, forgotten account, or even a closed account that generated tax reporting early in the prior tax year. It’s an easy fix, but most times results in tax penalties and additional payments.