| It's tax time and that translates to raised stress levels for many people.
Just thinking about preparing taxes can give some folks a headache. It's not only the concern over how much of your hard-earned money goes to taxes, but the stress over the actual filing process that gets to many of us. The key is to be prepared going into tax season and avoid making any bonehead moves when getting ready to file your tax return.
What do I mean by bonehead moves?
Here goes: not filing a return on time; trying to hide or under-reporting your income; reporting false tax information (for example, making up false deductions for charities and business expenses); not saving all tax records or receipts; entering incorrect information on the tax forms; claiming a dependent (for example, one born during the tax year) without adding a Social Security number; waiting until the very last minute to file; not getting your refund the fastest way; and immediately spending a tax refund.
With that said, here's some advice from tax professionals who say these tips will help tax filers: - Don't procrastinate. Resist the temptation to put off dealing with your taxes until the very last minute.
- "Don't be stupid by omitting income," one CPA said.
- File an accurate return. Inaccuracies in your return can trigger an IRS audit.
- Check on new rules on credits and deductions.
- If you can't get your tax information together by the April 18 deadline, you can file an extension to automatically move your deadline to Oct. 16. But don't wait to pay the taxes you owe: The IRS expects you to make a good faith estimate if you want to avoid penalties and interest.
- File for free. Most Americans can file their taxes for free — but many don't seize the opportunity.
- Watch for tax scams. According to the Better Business Bureau, tax season is a popular time of year for scammers looking to target Americans through emails, phone calls and text messages. They often pose as IRS agents asking for personal information or demanding payment. The real IRS primarily contacts taxpayers through snail mail and will not text, call or email.
For more advice to help you make smart financial decisions, check out CNBC's Financial Advisor Hub and Personal Finance section. Also, join the PF team's weekly Twitter Space, "This Week, Your Wallet," each Friday at 11 a.m. ET. Click here for a recording of last week's episode. |
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