Dreading tax season? Want to file but not sure if you are missing something? We have the most common mistakes people make on their taxes and how to avoid them to get your maximum refund
Its tax time again, a time of year many of us dread with the abundance of confusing paperwork and forms that must be filed. While compiling your taxes may be a headache, it is important to make sure that you are doing them correctly so that you can receive the maximum refund on your taxes. Tax returns are a great way to start an emergency fund or pay off some lingering debts that have been put on the back burner.
I always dread tax time, but I know that it is important to sit down and make sure I file my taxes correctly. The cheapest way to file your taxes is to do it yourself, although this can sometimes be a daunting task. After a few crumbled papers and hours of searching the internet for answers, I was finally able to successfully file my own taxes this year. During the process, I began to think about how easy it would be to miss something on my tax return or to file incorrectly. I decided to hit the streets and asked a few local accountants to name the most common mistakes on personal taxes and here is what they said:
Things you SHOULD do
Make sure to deduct your student loan interest when filing your taxes. Many people seem to forget to add this when compiling their taxes and it can be a significant amount depending on the amount of student loans you owe. Student loan payments, however, do not count towards deductions.
If you purchased a brand new vehicle in 2010, it may qualify for a tax deduction. Make sure to check it out and see if your purchase qualifies.
Don’t forget to include all of your 1099’s if you do any kind of freelance work or own a small business. Click here for a list of what can be counted as an 1099.
Things you SHOULDN'T do
Count personal expenses as business expenses. Seems like it would be a no brainer, but according to one accountant you would be surprised at the amount of items people try to pass off as business expenses.
Commuting to and from work is not a tax-deductable expense. Bummer…
Not file your taxes. In the long run it pays to get your taxes in on time and make sure that they are complete.
While the task of filing your taxes may seem like a major headache, it is a necessary task. If you are up to the task, try to file taxes on your own to save yourself the fee that many companies charge. It is relatively easy to do and you can keep your entire refund. If you have what looks to be a complicated situation on your hands, it may be wise to seek out a professional to ensure that you are getting your maximum refund. This year I am going to use my refund to bolster my emergency fund so that I do not have to use my credit card in case of an emergency. What do you plan to do with your tax return?