Benjamin Franklin’s idiom about death and taxes still holds completely true to this day, and most American citizens are focusing on filing their tax returns to stay current with the IRS. It’s important to be in good standing with the U.S. Government, as failing to file your taxes correctly can create the potential for fees, punishments, and future audits. If you’re in need of a qualified tax attorney in Maryland, the experts here at JDKatz are ready to help. Since 2000, our tax law and estate planning lawyers have worked to help Maryland and Washington D.C. residents optimize the outcome for their unique cases, ranging from criminal litigation to business structuring and beyond. We were founded to focus on tax law and all its complexities, working to guide you through this complex process to secure a stable and favorable outcome for your future.
When it comes to filing taxes, there are a large number of errors made that we see on an almost daily basis. Today, we’ll highlight a few more of these areas and some advice that may help you to rectify your tax mistakes. If you need assistance, be sure to reach out to our law firm today!
Failing to Stay Up to Date
One interesting aspect of our complex tax law is that it is in a constant state of change. Every year, our government rolls out revisions that have the potential to affect your filing in a big way. 2018, for example, consists of higher standard deductions for taxpayers, the elimination of personal exemptions, and so on. It falls on you as the taxpayer to stay up to date with these updates to avoid costly errors. The IRS is a great resource for learning more about these updates if you are concerned. If your tax filing requires additional help, our tax attorneys are here and ready to help.
Calculation Errors
While your tax forms are made to be straightforward with written instructions, there is a lot of potential to make a mathematical mistake. Many citizens complain about the formulas used, as they can quickly become too complex for you to enter a number with complete certainty. “Add line (a) to line (b), then subtract that amount from line (c) if you meet requirements (1) and (2), but not if (3) is in play.” This example may not deliver the most clarity, but it can certainly remind you of how easy it can be to make an error in your calculations.
Luckily, today’s technology has improved to enable most taxpayers to take care of the calculations with confidence utilizing preparation software. Tax companies have honed their programs to provide more accuracy and less complexity with many tax calculations. If you own your own business, or if you have a unique tax liability, it can prove very valuable to reach out to a tax professional for assistance.
Using the Wrong Forms
The IRS relies on three forms to account for varying types of income. Choosing the wrong form may not be a major problem, but it can certainly leave you at risk for unaccounted liabilities. Form 1040 is the basic form that all citizens can rely on. Taxpayers with simpler returns can utilize 1040A and 1040EZ to save time and stress. Form 1040EZ, for example, is one page. This can save you a lot of time, but remember that you run the risk of missing out on unclaimed tax benefits. Different types of entities will require different schedules to report profits and losses.
Filing the Wrong Status
One mistake that can yield serious consequences is filing under the wrong status. Standard deduction amounts and tax rates differ based on your status, which can consist of:
- Single
- Married filing jointly
- Married filing separately
- Head of Household
- Widowed
The biggest potential we’ve seen for future problems stems from couples who cohabitate. Recent newlyweds may not remember that their tax filing is for the previous year and file their return as single. In this same situation, one spouse may elect to file jointly while the other files separately. Your filing status dictates your benefits and liabilities, so be sure to choose correctly when filling out your form.
Not Keeping Tax Records
As we mentioned in our previous blog, many people choose not to file because they are afraid of the consequences. One fear that many citizens have is being audited by the IRS. When this occurs, an agent will be assigned to your account and will review your filings to ensure that all of the information provided is accurate and within accordance of the law. This is not done to be spiteful, but for taxpayers who have not kept good records of their filings and finances, an audit can be very troublesome. It’s important to file away all of your previous tax returns in case it is ever needed, but for audit reasons, you should keep a copy of your last three tax returns. The IRS cannot legally audit you beyond this three-year mark. If you have received notice that you or your business will be audited, it’s essential to reach out to experts such as our Maryland tax attorneys for assistance!
Filing taxes is one process that many people complain about, yet it is a cornerstone to the continuation of our roads, schools, and other vital aspects of society. If you are worried about filing your return this season, it’s not too late to reach out to JDKatz. Our experienced lawyers specialize in tax law, ranging from tax fraud to qui tam lawsuits. Contact us today to learn more about our practice!
