Last Minute Tax Tips
It’s that time of the year again and it can be quite overwhelming when it comes down to filing your taxes. With the deadlines quickly approaching you want to stay focused and make the right moves. Gathering the right paperwork is essential as well as consulting a Fort Lauderdale tax attorney that can explain all the applicable deductions in your case. There are some things to keep in mind that will help you increase your tax savings and avoid unnecessary audits:
- Make sure you report all your incomeNot reporting your income to the IRS is a mistake that can yield a number of serious consequences. Auditors are trained to look at tax fraud and if you are found on their black list, chances are you are either penalized with civil fines or your case may end up being referred to the IRS’ criminal investigation division.
Every time you receive a check from your permanent or freelance job you are required by law to report that income and pay taxes on it. Remember the 1099s are initially filed with the IRS so the numbers you report should match their records otherwise an audit might be on the way.
- Understand your tax creditsTax credits can save you tons on tax deductions. They are designed as an incentive to some types of behavior. These opportunities are available to low to moderate income earners. It’s good you take some time to research into the types of credits available. There are huge saving opportunities for parents, students, and low earners. Some of the most common ones include Earned Income Tax Credit, American Opportunity Tax Credit, Lifetime Learning Credit, Child and Dependent Care Credit, and Savers Tax Credit.
- Don’t forget deductionsAlthough deductions come in handy, they can be quite tricky. In other words, it’s important they are 100% accurate in order to yield maximum results. There are various deductions available, which may include your mortgage interest, medical expenses, charitable contributions and so on. Make a few phone calls and fill in all the blanks. You should claim as many deductions as possible and the numbers will work out beautifully for you!
- Never too late to contribute to your IRA If you have an individual retirement account (IRA) you can deduct all contributions in your tax return. These earnings can go tax deferred with the possibility of being taxed at a lower rate once you retire. Workers 50 years of age and younger can contribute up to $5, 500 a year to IRA while older than 50 can contribute as much as $6, 500 a year.
- Avoid mistakes by filing electronicallyAlthough making mistakes is part of human nature, many of them can be avoided when taking simple steps. A major mistake in your return can get you audited or delay your refund. Millions of math errors are identified each year by the IRS from the previous year’s returns. One simple solution to this problem is filing electronically. So far, there is only a 1% chance of making a mistake electronically while paper tax returns errors are as high as 21%.
Having the IRS pursue an invalid claim against you may be unavoidable but you can manage and reduce this stress with the help of Fort Lauderdale tax lawyers. With a capable tax lawyer on your side the ride will be less bumpy.