Do You Make These 9 Common Income Tax Mistakes?
Its income tax time again. With the April 15th Deadline fast approaching you need to beware of these 9 common income tax mistakes as stated by Intuit the makers of Turbo-Tax.
1 - Not taking all of your deductions.
The 2 most common deductions missed are charitable deductions and the home office deduction. Many people underestimate the value of clothes and other items given to charity. Many taxpayers who are legally entitled to the home office deduction fail to take it for fear of being audited
2 – Not accounting for Reinvesting Mutual fund Dividends
Buying extra shares with reinvested dividends can affect your cost basis when you sell. Many taxpayers overpay the IRS because they don’t adjust the tax basis.
3 – Not claiming carryover items.
The two most common carryover many taxpayers miss are state and local income taxes paid with the prior year return and carryover capital losses.
4 – Not naming a beneficiary or naming wrong Beneficiaries to your IRA, 401k or other retirement plan.
If you fail to name a beneficiary then the money passes to your estate with unwanted tax consequences to your heirs.
5 – Not taking advantage of Matching employer contributions.
Many employees fail to invest in company sponsored retirement plans and loose out on matching contributions
6 – Failure to make estimated Quarterly Tax Payments.
Self Employed taxpayers are required to pay estimated quarterly payments to the IRS. Failure to do so may cause and underpayment penalty
7 – Poor planning in exercising stock options.
Taxpayers who exercise stock options then sell the underlying stock fail to anticipate and set aside money to pay the capital gains tax
8 – Not adjusting withholding when you change Jobs.
Taxpayers who change jobs for more money don’t always adjust their withholding to account for the higher pay and tax burden that goes with it.
9 - Contributing to a Roth IRA when your Income is too high.
Single taxpayers who earn over $110,000 or married Taxpayers who earn over $160,000 cannot contribute to a Roth IRA.
1 - Not taking all of your deductions.
The 2 most common deductions missed are charitable deductions and the home office deduction. Many people underestimate the value of clothes and other items given to charity. Many taxpayers who are legally entitled to the home office deduction fail to take it for fear of being audited
2 – Not accounting for Reinvesting Mutual fund Dividends
Buying extra shares with reinvested dividends can affect your cost basis when you sell. Many taxpayers overpay the IRS because they don’t adjust the tax basis.
3 – Not claiming carryover items.
The two most common carryover many taxpayers miss are state and local income taxes paid with the prior year return and carryover capital losses.
4 – Not naming a beneficiary or naming wrong Beneficiaries to your IRA, 401k or other retirement plan.
If you fail to name a beneficiary then the money passes to your estate with unwanted tax consequences to your heirs.
5 – Not taking advantage of Matching employer contributions.
Many employees fail to invest in company sponsored retirement plans and loose out on matching contributions
6 – Failure to make estimated Quarterly Tax Payments.
Self Employed taxpayers are required to pay estimated quarterly payments to the IRS. Failure to do so may cause and underpayment penalty
7 – Poor planning in exercising stock options.
Taxpayers who exercise stock options then sell the underlying stock fail to anticipate and set aside money to pay the capital gains tax
8 – Not adjusting withholding when you change Jobs.
Taxpayers who change jobs for more money don’t always adjust their withholding to account for the higher pay and tax burden that goes with it.
9 - Contributing to a Roth IRA when your Income is too high.
Single taxpayers who earn over $110,000 or married Taxpayers who earn over $160,000 cannot contribute to a Roth IRA.
Its income tax time again. With the April 15th Deadline fast approaching you need to beware of these 9 common income tax mistakes as stated by Intuit the makers of Turbo-Tax.
1 - Not taking all of your deductions.
The 2 most common deductions missed are charitable deductions and the home office deduction. Many people underestimate the value of clothes and other items given to charity. Many taxpayers who are legally entitled to the home office deduction fail to take it for fear of being audited
2 – Not accounting for Reinvesting Mutual fund Dividends
Buying extra shares with reinvested dividends can affect your cost basis when you sell. Many taxpayers overpay the IRS because they don’t adjust the tax basis.
3 – Not claiming carryover items.
The two most common carryover many taxpayers miss are state and local income taxes paid with the prior year return and carryover capital losses.
4 – Not naming a beneficiary or naming wrong Beneficiaries to your IRA, 401k or other retirement plan.
If you fail to name a beneficiary then the money passes to your estate with unwanted tax consequences to your heirs.
5 – Not taking advantage of Matching employer contributions.
Many employees fail to invest in company sponsored retirement plans and loose out on matching contributions
6 – Failure to make estimated Quarterly Tax Payments.
Self Employed taxpayers are required to pay estimated quarterly payments to the IRS. Failure to do so may cause and underpayment penalty
7 – Poor planning in exercising stock options.
Taxpayers who exercise stock options then sell the underlying stock fail to anticipate and set aside money to pay the capital gains tax
8 – Not adjusting withholding when you change Jobs.
Taxpayers who change jobs for more money don’t always adjust their withholding to account for the higher pay and tax burden that goes with it.
9 - Contributing to a Roth IRA when your Income is too high.
Single taxpayers who earn over $110,000 or married Taxpayers who earn over $160,000 cannot contribute to a Roth IRA.
1 - Not taking all of your deductions.
The 2 most common deductions missed are charitable deductions and the home office deduction. Many people underestimate the value of clothes and other items given to charity. Many taxpayers who are legally entitled to the home office deduction fail to take it for fear of being audited
2 – Not accounting for Reinvesting Mutual fund Dividends
Buying extra shares with reinvested dividends can affect your cost basis when you sell. Many taxpayers overpay the IRS because they don’t adjust the tax basis.
3 – Not claiming carryover items.
The two most common carryover many taxpayers miss are state and local income taxes paid with the prior year return and carryover capital losses.
4 – Not naming a beneficiary or naming wrong Beneficiaries to your IRA, 401k or other retirement plan.
If you fail to name a beneficiary then the money passes to your estate with unwanted tax consequences to your heirs.
5 – Not taking advantage of Matching employer contributions.
Many employees fail to invest in company sponsored retirement plans and loose out on matching contributions
6 – Failure to make estimated Quarterly Tax Payments.
Self Employed taxpayers are required to pay estimated quarterly payments to the IRS. Failure to do so may cause and underpayment penalty
7 – Poor planning in exercising stock options.
Taxpayers who exercise stock options then sell the underlying stock fail to anticipate and set aside money to pay the capital gains tax
8 – Not adjusting withholding when you change Jobs.
Taxpayers who change jobs for more money don’t always adjust their withholding to account for the higher pay and tax burden that goes with it.
9 - Contributing to a Roth IRA when your Income is too high.
Single taxpayers who earn over $110,000 or married Taxpayers who earn over $160,000 cannot contribute to a Roth IRA.
posted by zzzzzzzzzzz at
3:56 AM
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