We’re only a few weeks out from the end of tax season. The IRS started taking tax returns for the 2021 tax year on January 24th. At MBE CPAs, we’ve compiled a list of three of the most common tax season mistakes you want to avoid.
There are a few things that you can still do, before the April 18th tax deadline, to determine your 2021 tax liability. One of these is to contribute up to $6k (or $7k if you turned 50 or older last year) to an IRA for 2021. Our financial advisors at MBE Wealth Management or your Tax Advisor could help you formulate a plan to optimize your last-minute savings.
1. Missing last-minute opportunities to save
2. Waiting to file
You never know when your tax filing may end up becoming more complicated than you thought. Whether it’s because you need additional paperwork, other information or you need to switch from using cheap software to hiring a professional. You want to make sure that you’re filing with time that the people who are busiest during the tax season are available to you.
Next, there’s nothing worse than owing a large amount of money to the IRS and finding out just before the payment deadline. By getting your taxes done early, you’ll have more time to save up to pay and avoid interest and penalties.
If you receive a refund, filing earlier typically means that you’ll get your money back sooner. Some things to keep in mind with this, is that if you are applying for a mortgage or have a child that is looking into financial aid, your tax return must be done beforehand. This gives you a head start on filing those applications.
3. Not having a professional file your taxes
We live in an era of instant gratification. However, instant gratification when it comes to processing your own taxes (if you don’t have a background in doing so), could mean that you’re missing out on some valuable deductions or credits that may be available to you.
It’s no secret that these are only a few of the tax filing mistakes you could avoid. Take advantage of tax-saving opportunities, file early, and choose a professional to prepare your taxes. They’re professionals for a reason—make it less taxing on yourself. Reach out to one of our tax professionals to get your 2021 tax filing completed.