The tax season is challenging enough. If we commit mistakes in the filing, our headache turns into an actual problem that may cost us money or result in an IRS notice for whatever issue is in your submission. This is where the benefits of hiring a CPA come in. Let’s first go over what mistakes may ambush your filing of taxes and how they can be avoided with professional help.
Missing or Incorrect Personal Information
A common mistake is leaving out or misstating personal details on a tax return, which can cause delays, denied refunds, or IRS notices. A certified public accountant ensures all information is accurate and matches government records for smooth processing.
Failing to Report All Income Sources
Forgetting income from side jobs, investments, or freelancing can trigger IRS penalties since all 1099s are reported to them. A CPA ensures every income source matches official records, protecting you from audits and fines.
Overlooking Eligible Deductions and Credits
Many taxpayers miss deductions and credits they qualify for, leading to overpayment. A CPA identifies all eligible opportunities to maximize your refund and minimize your tax liability.
Misclassifying Business Expenses
Incorrectly classifying expenses can trigger IRS scrutiny and denied deductions. A CPA ensures your expenses meet tax rules, keeping you compliant and your deductions protected.
Filing Under the Wrong Status
Choosing the wrong filing status, like Head of Household instead of Single, can affect your tax rates and deductions. One of the advantages of using a CPA for taxes is ensuring you file under the correct status, avoiding costly errors and IRS red flags.
Failing to Report Investment Earnings
Omitting investment income, like dividends or stock sales, can lead to IRS fines and interest. A CPA can identify unreported earnings and file corrections, preventing penalties.
Ignoring State and Local Tax Obligations
Overlooking state or local taxes can trigger audits and fines. CPAs ensure all income is reported and applicable credits are claimed, keeping you compliant.
Making Math or Calculation Errors
Math mistakes, like transposed numbers or miscalculated percentages, can cost you penalties or lost refunds. CPAs review every calculation with expert precision to prevent costly errors.
Missing the Filing or Payment Deadline
Missing tax filing or payment deadlines leads to penalties and interest. A CPA can help set up payment plans and extensions, ensuring all deadlines are met and extra charges are avoided.
Not Keeping Proper Documentation and Records
If one fails to present the needed documents and other papers to the IRS, this could be a problem. You must be able to substantiate your deduction claim for business expenses and medical costs. Without them, forget it.
Essential advice on which documents to keep and for how long is given by a CPA. They advise you on the best way to organize them throughout the year.
Turn Tax Stress to Financial Confidence
The experience of a certified public accountant is very useful. They come to the rescue when you fail to record revenues, forget deductions, or are about to miss deadlines. Beyond preparing your return, the benefits of hiring a CPA are that it gives you peace of mind knowing your tax filing is correct and compliant. If you need a trusted certified public accountant, visit us at Nicholas J. Coco or 201-955-3100.
