Tax filing season is underway and if you’re among the millions of Americans who have yet to file, you may be weighing the pros and cons of hiring a tax return service. And while yes, there is an up-front cost associated with hiring a tax or CPA firm, not working with a professional could cost you more in the long run. Below are just a few of the most common (and most costly) mistakes people make when they prepare their own tax return.
Using the wrong filing status
One of the first things you’ll need to enter on your tax form is your filing status. For example, married individuals can file as either married filing jointly or married filing separately. Divorced and legally separated taxpayers who pay more than 50% of household expenses (including rent, mortgage payments and property taxes, among others) may be eligible to file as head of household (HOH). To file as HOH, an individual must meet certain requirements, such as have a qualifying dependent (i.e. a child, foster-child or aging parent) living with them for more than half of the year.
Each filing status has its own tax rates and thresholds and depending on your situation, if you file using the wrong status, you could receive a smaller tax return. It’s also worth noting that if you don’t qualify for the filing status you’ve chosen, fixing your return can be a hassle.
Forgetting to add information
Do you have self-employment income that comes from numerous sources? If you forget to report income information from a 1099 or W-2, the IRS may reject your return. (In some cases, the IRS may send you a letter saying your refund will be delayed until you file an amended return.) If your amended return shows you owe the IRS money, you could face a late payment penalty.
Working with an expert
When you hire a CPA to prepare your tax return you’ll have the peace of mind that comes with knowing the job will be done right. The team at Hughes, Snell & Co., PA has years of experience in providing comprehensive tax and financial planning services individuals and businesses throughout Southwest Florida. For more information on our company, the types of services we provide, or to schedule a complimentary consultation, call us today to get started. Call us today to learn why we’re the #1 most trusted CPA firm in SWFL.