The only thing worse than paying taxes is paying extra because of small mistakes. Income Tax Filing is already tricky, and changing rules make it even harder. Tax Services can help, but knowing common errors can save money. So, what mistakes should you avoid?
Are You Reporting All Income Correctly?
Missing income is a big mistake, especially with gig jobs. Many people forget about interest, freelance payments, or crypto earnings. The IRS is keeping a close eye on digital income, so reporting everything is key. When filing 2024 taxes, remember these 2025 changes:
Standard Deduction Increase: Now $15,000 for single filers and $30,000 for married couples, up from $14,600 and $29,200.
Marginal Rate Adjustments: The 24% tax bracket starts at $103,350, up from $95,376 in 2023.
Foreign Income Exclusion: Increased to $130,000 from $126,500, giving relief for international earners.
For corporations, stricter foreign income rules mean documentation is a must. Not reporting digital or non-traditional income can bring penalties.
Did You Choose the Right Tax Filing Status?
Picking the wrong filing status can lead to lost deductions. Tax Accountant professionals often see this mistake. Filing status affects tax rates and deductions, so it’s important to choose correctly. The five options are:
- Single
- Married Filing Jointly
- Married Filing Separately
- Head of Household
- Qualifying Widow(er) with Dependent Child
Choosing the wrong one may mean missing out on credits. For example, Heads of Household get a $22,500 standard deduction, much higher than the $15,000 for single filers.
Are You Overlooking Important Deductions and Credits?
Many taxpayers forget about deductions, which can lower their tax bill. Here are some often-missed deductions:
- Student Loan Interest: Deduct up to $2,500, depending on income limits.
- Home Office Expenses: If you use part of your home only for work, you may qualify.
- Medical Costs: Deduct medical expenses over 7.5% of your income, including prescriptions and treatments.
Businesses can also claim deductions for office supplies, equipment, and travel. Keeping track of expenses can lead to huge savings.
Is Your Tax Information Accurate?
Even small errors can cause delays or audits. Here are common tax mistakes:
- Incorrect Social Security numbers
- Wrong addresses
- Missed or incorrect deductions
Checking and double-checking your return before submitting is a smart move. Hiring a Tax Accountant or using professional Tax Services can help catch mistakes before they cost you.
Filing taxes doesn’t have to be stressful. Avoiding these mistakes ensures you keep more of your hard-earned money. Need help? Professional Tax Services make the process smooth and error-free.