4 Tips for Proper Tax Filing Carmichael Hill

Tax season is just around the corner with the new year in full swing. Mistakes are bound to happen here and there given how long and complicated the filing process can be. As many of us know, even small and unintended mistakes can lead to big penalties. That’s why it never hurts to brush up on the basics!

Knowing the most common tax filing mistakes is critical to preventing and slip ups and the serious headaches that accompany them. Read on to learn how you and your family or business can avoid making mistakes this tax season.

  1. Confirm Your Numbers and Information

Make sure that your filing status, name, and the names and Social Security numbers of your dependents are accurate. It’s also not a bad idea to review the bank account numbers you included if you requested a refund routed directly to your account (some of those digits can be lengthy!). Next, let’s face it, not all of us are exceptional when it comes to math. Taxpayers should always confirm that their math is correct, as this is one of the most common mistakes made when filing.[1]

  1. Be Careful

Be cautious while entering information from your W-2s and forms alike. Income like wages, dividends, and interest are all reported directly to the IRS in addition to you personally. Modern software makes it easy to catch discrepancies between what you report on your Form 1040 and what the IRS has already been told you earned, so casual typo that leaves off a zero can have a big (horrifying) impact![2]

If you notice something off from one of the tax forms you received and you need to dispute it, then you can contact your employer or the business that made the specific transaction. They will then provide you with a revised and corrected tax form,[3] but make sure you do this early on in tax season so that you can file on time! You can request a filing extension if you can’t fix it by the deadline, but you still need to send in a tax payment for what you believe you’ll owe. Getting an extension pushes back your filing date but not your payment date.

  1. Is the Standard Deduction Right for You?

Taxpayers should also be wary of automatically assuming the standard deduction is right for them. It’s important to know whether it’s best for you to take the standard deduction or itemize your deductions on your return, as the decision could affect how much you owe in income taxes. Itemizing your deductions may be the right choice if you had large, uninsured medical or dental expenses, paid sizable amounts in mortgage interest or property taxes, had extensive business losses, or made significant contributions to certain charities.[4]

  1. Avoid Early Retirement Account Withdrawals if You Can!

Lastly, making an early withdrawal from a retirement account without an exempted reason can cost you. Furthermore, if you forget to put that information in your tax reports, you will get a letter from the IRS stating that you owe an additional tax on the early withdrawal amount plus the interest and penalties that have accrued on that additional amount until payment is made.[5]

Double-Check!

Some of the best advice when it comes to filing your taxes is to double-check! It’s better to go back and give yourself the time to review your information than it is to deal with the pain and consequences of silly mistakes. Utilizing a qualified tax professional or a tax preparation software program can help reduce the likelihood of mistakes. Be sure to confirm your entries, look out for typos, and avoid leaving anything blank. If you’re hoping to make tax season a little easier this year, reach out to our team for a complimentary review of your finances!

 

[1][2][3]: https://www.irs.gov/newsroom/common-tax-return-mistakes-that-can-cost-taxpayers
[4]: https://www.equifax.com/personal/education/personal-finance/avoid-tax-mistakes/
[5]: https://pro.bloombergtax.com/brief/common-mistakes-in-tax-preparation/

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Carmichael Hill & Associates, Inc. is a U.S. Securities and Exchange Commission Registered Investment Advisory firm. Registration does not imply that the SEC has endorsed or approved the qualifications of Carmichael Hill or its respective representatives to provide any advisory services. Advisor does not render or offer to render personalized investment advice or financial planning advice through this medium. Advice can only be given after:

  1. Delivery of a disclosure statement by advisor to client.
  2. Execution of our Investment Advisory Agreement between the client and the advisor.
  3. Initial payment of the planning fee or investment advisory fee by the client to the advisor.
  4. Advisor will not solicit or accept business in any state in which she or he is not properly registered or otherwise qualified to conduct business by virtue of a state “de minimis” exemption.
DISCLAIMERS

The information in this web site is based on data gathered from what the Advisor believes are reliable sources. It is not guaranteed as to accuracy, and does not purport to be complete and is not intended as the primary basis for investment decisions. It should also not be construed as advice meeting the particular investment needs of any investor. The identification of specific funds and model portfolios is being made on the assumption that the investor would participate in that investment or portfolio on a long-term basis and only after consulting with their investment advisor to determine their needs and tolerance for risk. With respect to any such identification, there can be no assurance that the fund or model portfolio will in fact perform in the manner suggested.

The results do not represent actual trading due to the timing of the clients’ trades and their trading costs. They may also not reflect the impact that material economic and market factors might have had on the advisor’s decision making if the advisor were managing the clients’ money. Investment and portfolio results may be different than the results the advisor’s discretionary clients achieve due to the timing of trades and the market conditions.

All references that might be made to an investment or portfolio’s performance are based on historical data and one should not assume that this performance will continue in the future.

LINKS DISCLAIMER

At certain places on this Carmichael Hill & Associates, Inc. Internet site, live ‘‘links’ to other Internet addresses can be accessed. Such external Internet addresses contain information created, published, maintained, or otherwise posted by institutions or organizations independent of Carmichael Hill & Associates, Inc. CHA does not certify, endorse or control these external Internet addresses and does not guarantee or assume responsibility for the accuracy completeness, efficacy, timeliness, or correct sequencing of information located at such addresses. Use of any information obtained from such addresses is voluntary.

REGULATORY DISCLOSURE

Carmichael Hill & Associates, Inc. is a U.S. Securities and Exchange Commission Registered Investment Advisory firm. Registration does not imply that the SEC has endorsed or approved the qualifications of Carmichael Hill or its respective representatives to provide any advisory services. Advisor does not render or offer to render personalized investment advice or financial planning advice through this medium. Advice can only be given after:

  1. Delivery of a disclosure statement by advisor to client.
  2. Execution of our Investment Advisory Agreement between the client and the advisor.
  3. Initial payment of the planning fee or investment advisory fee by the client to the advisor.
  4. Advisor will not solicit or accept business in any state in which she or he is not properly registered or otherwise qualified to conduct business by virtue of a state “de minimis” exemption.
DISCLAIMERS

The information in this web site is based on data gathered from what the Advisor believes are reliable sources. It is not guaranteed as to accuracy, and does not purport to be complete and is not intended as the primary basis for investment decisions. It should also not be construed as advice meeting the particular investment needs of any investor. The identification of specific funds and model portfolios is being made on the assumption that the investor would participate in that investment or portfolio on a long-term basis and only after consulting with their investment advisor to determine their needs and tolerance for risk. With respect to any such identification, there can be no assurance that the fund or model portfolio will in fact perform in the manner suggested.

The results do not represent actual trading due to the timing of the clients’ trades and their trading costs. They may also not reflect the impact that material economic and market factors might have had on the advisor’s decision making if the advisor were managing the clients’ money. Investment and portfolio results may be different than the results the advisor’s discretionary clients achieve due to the timing of trades and the market conditions.

All references that might be made to an investment or portfolio’s performance are based on historical data and one should not assume that this performance will continue in the future.

LINKS DISCLAIMER

At certain places on this Carmichael Hill & Associates, Inc. Internet site, live ‘‘links’ to other Internet addresses can be accessed. Such external Internet addresses contain information created, published, maintained, or otherwise posted by institutions or organizations independent of Carmichael Hill & Associates, Inc. CHA does not certify, endorse or control these external Internet addresses and does not guarantee or assume responsibility for the accuracy completeness, efficacy, timeliness, or correct sequencing of information located at such addresses. Use of any information obtained from such addresses is voluntary.