Tax season has rolled around once again, and so has the inevitable dread that comes with it.
It’s understandable that a lot of us worry we’ll make one small, accidental mistake and then get in “big trouble” with the IRS after. When it comes to something as complicated and serious as taxes, it’s sometimes hard to feel confident that you’re doing it right.
Enter accountants. Their entire job is to make sure their clients’ taxes ― and their own taxes ― are all squared away and mistake free. That’s why we asked them to share what they personally would never do (and warn others from doing) when filing. Steal their secrets below as you work on yours:
1. They would never file without being sure all documents are in.
For one, this means reporting all of your income, no matter how small.
“If I were to file my tax return without reporting some income that was reported to me on my tax return, the IRS would likely catch it, calculate what my taxes should have been had I reported that income — often without giving me any credit for legitimate deductions or basis against that income — and send me a CP2000 notice,” said Logan Allec, a CPA and the owner of tax relief company Choice Tax Relief.
He added that CP2000 notices are a pain to deal with and “might even propose to assess a substantial understatement penalty, which can be quite large.”
Documentation regards more than just income, too. To figure out what documents you specifically need to file, check out an individualized tax document checklist. For example, you may have extra documentation if you have dependents, student loans and more.
Additionally, Allec suggested the following:
- Making a list of all the tax documents used to prepare the previous year’s return
- Recalling any new accounts opened, or new sources of income to add to the list
Alternatively, another approach is to pull the wage and income transcript for the year directly from the IRS, he said, which shows all the tax documents that…
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