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Income Tax Mistakes

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Author: Donald

The fact is, Americans are required to file income tax returns. Each and every citizen is required to be accounted for during tax season — including children (as dependents).

Most people earn income by working for a company and receiving a regular paycheck from which income taxes have been withheld based upon information provided to the employer. Some people have small businesses or are employed as independent contractors, and income taxes are not withheld from their pay. Income gained through interest earned on savings is also considered income.

We all have to file taxes, but there are some very common mistakes that cost us money that we all can avoid with just a little due diligence.

Mistake #1: Not filing a return because you don't have the money to pay the tax that is owed: This is a major mistake that many people make. You will encounter additional fines and penalties by not filing, whether you can pay what is owed or not. If you can't pay what is owed, the government will work out a payment plan that will allow you to pay your taxes while avoiding many of the fines and penalties that are encountered when taxes are not filed.

Mistake #2: Check your math…twice…maybe three times. Even if you make a simple mathematical error, if you don't pay enough tax, you will suffer fines and penalties. The government does not sympathize with "honest" mistakes.

Mistake #3: Sign your return if you mail it in by snail mail. If your return is not properly signed, the government deems the return not filed. If you pay the right amount in taxes but don't sign your return, you will be fined for not filing on time.

The bottom line here is that you need to file your tax returns on or before the due date and those returns need to be accurate and complete.









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