Tax Preparation

Chewed-on pencils, crumpled-up pieces of paper, worn-down erasers, and your hair standing on end from running your hands through it in frustration, what do these all mean? Why, of course! You’re doing your taxes!

It’s an annual ritual that bonds Americans as truly as fireworks and complaining about our mothers-in-law: tax time. As April 15th draws near, tempers grow short and time seems to speed up. A contest brews between two worries: that you’ll make a mistake that will bring the scrutiny of the IRS upon your finances, or that you’ll overlook deductions that could have kept more money in your own pocket.

How to ease the frustrations? First, make sure you avoid the most common taxpayer mistakes. Even if you have found an accounting firm in Naperville to advise you, it is possible to overlook things. A recent study by the Government Accountability Office (GAO) discovered errors even on most returns completed by paid tax preparers. These errors can be quite costly to fix. Thus, it’s important for each taxpayer to know the most common mistakes in order to avoid them.

The number one mistake is the easiest to correct: math errors. Too many bleary-eyed nights can lead to adding when you should subtract or copying numbers wrong. This can be fixed by utilizing tax preparation software. Also, always double-check your entries, for it’s easy to transpose numbers (for example, putting $3087 instead of $3807).

The second most common mistake is one that costs many people: overlooking deductions. Even though it’s much simpler to take the standard deduction, it’s almost always better to itemize. The GAO estimates that every year, more than 2 million taxpayers overpay because they fail to do this. Because there is such a long and varying list of possible deductions, including job search expenses, volunteer work expenses and gambling losses, this is where it’s easiest to get lost within the tax codes. It’s also where some professional help with your Naperville tax preparation can come in handiest. Your tax advisor can go through all your expenses with you and may well find deductions that didn’t occur to you. Additionally, a good advisor will guide you to future money decisions to help lighten your tax load in subsequent years.

Even if you do utilize tax preparation software or an accountant, keeping good records is up to you. Here is where many Americans make a third mistake: forgetting all about taxes once April 15th has passed. Something as simple as a shoebox or a drawer for receipts, health bills and donations can assist greatly in the next year’s filing.

Avoid these common mistakes and you may avoid the hair-pulling and teeth-gnashing when next April rolls around! (Elle Wood)

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