Most people now prepare their taxes themselves with easy-to-use tax software programs. As good as the software is, it’s not 100% perfect. Here are some mistakes Americans make when preparing their taxes.
Don’t let the government keep your money
This might surprise you: getting a refund is a bad thing! Why? Because you let the federal government hold on to your money during the year – interest free! Rather than overpaying to get a refund, change your withholding with your HR department and underpay. Set up an auto transfer to move the extra in your paycheck to a savings account and accrue interest all year.
Don’t file an extension
Filing an extension does not mean you don’t have to pay any owed tax for six months; it only means that you don’t have to finish filing. You still have to pay any owed tax by April 15. This can make it difficult to figure out what you owe, and, if you calculate incorrectly, you might have penalties from the IRS. You still have time to get your taxes filed on time. Don’t put it off.
Do pay your taxes
Believe it or not, people still argue the government has no right to levy taxes; this argument was settled years ago. Failure to pay taxes can result in jail time and stiff financial penalties. Individuals who take time to argue this case before a court generally find themselves on the losing end – with a hefty fine to pay for wasting the court’s time.
Paying taxes is a fact of life. Procrastinating is never advisable and, by filing on time, you’ll avoid additional penalties. Tax returns are due by Tuesday, April 17, 2018.