As the manager of Advisory Group Associates' Tax & Advisory firms, Frank L. Zerjav, CPA, works with individuals, primarily high net worth clients, on taxation issues. As a CPA, Frank Zerjav is able to provide comprehensive advice and non-traditional solutions to clients preparing to file their income taxes. He also is able to catch mistakes before they present problems. Here are three of the most common errors that individuals make when preparing their income tax returns.
1. According to Forbes magazine, 7 million people fail to file their income taxes at all each year. This is dangerous, as the IRS is able to impose a penalty of 5 percent each month, up to a maximum of 25 percent, of the unpaid tax due each year.
2. Mathematical mistakes are also common. In best-case scenarios, the IRS will let you know about the mistake and allow you to correct it. However, uncaught mistakes can present a skewed view of your finances that may come back to haunt you later.
3. Failing to include all deductibles is also common. For example, in 2016, IRA contributions up to $5,500, or $6,500 if you are over the age of 50, could be deducted assuming you didn’t have a retirement plan through work and met the associated income limits. The US tax code contains many deductions like this that taxpayers fail to take advantage of.
1. According to Forbes magazine, 7 million people fail to file their income taxes at all each year. This is dangerous, as the IRS is able to impose a penalty of 5 percent each month, up to a maximum of 25 percent, of the unpaid tax due each year.
2. Mathematical mistakes are also common. In best-case scenarios, the IRS will let you know about the mistake and allow you to correct it. However, uncaught mistakes can present a skewed view of your finances that may come back to haunt you later.
3. Failing to include all deductibles is also common. For example, in 2016, IRA contributions up to $5,500, or $6,500 if you are over the age of 50, could be deducted assuming you didn’t have a retirement plan through work and met the associated income limits. The US tax code contains many deductions like this that taxpayers fail to take advantage of.