A tax return is the bunch of forms that you file with the Internal Revenue Services or IRS to report your income, expenses and other relevant information related to tax. It allows you to schedule your tax payment, calculate your liabilities and request a refund if you made an overpayment. Tax returns need to be prepared scrupulously as any mistake when filing unfiled tax returns can lead to hefty fines and even prison time in some cases. In this blog post, we will discuss 5 key tips that will help you file your tax returns correctly. Read on.
1. File for an Extension
For the 2020 tax year, the IRS has extended the deadline from April 15, 2021 to May 17, 2021. But this extension is not available to all taxpayers. If you are self-employed, a small business owner or are, in any way, liable to pay estimated taxes quarterly, you still have to pay your taxes and file a return by April 15, 2021. You may file for a time extension to file your taxes but if you already owe the IRS, there is no extension for that. If you fail to pay your taxes by the due date or pay less than what is due, you will have to pay interest on the balance and may face a hefty penalty.
2. Be Extra Careful While Documenting Charitable Contributions
Always be careful when documenting any charitable contributions in your returns. If you have made a contribution of $250 or more and want to claim it as an itemized deduction, make sure you have a written acknowledgement from the charitable organization. The IRS is very strict about false charitable contribution claims.
3. Don’t forget to Consider Disaster Loss
If you live in a federally declared disaster area, any loss you suffer can be claimed as an itemized deduction. But once you claim it, you cannot claim another loss because of theft or any other disaster. The loss you claim in your return must be related to your home, vehicle or household items. Additionally, if you received any payment from the insurer, it will be subtracted from the deduction you wish to claim.
Related Blog: Answering 5 FAQs about IRS Tax Installment Agreement
4. Hire a Professional Tax Attorney
If you are in doubt about the accuracy of your return, it is recommended that you hire a professional attorney who can help you with your tax return preparation and filing. A professional will have the relevant experience and knowledge of tax calculation and return preparation that will minimize the risk of making any wrong entries.
When filing your tax returns, make sure to double-check all information. Even a slight mistake in the return can invite avoidable audits and penalties. When in doubt, it is recommended that you hire a tax attorney who can help you with your tax return filing. If you are looking for tax attorneys in Dallas, Texas and nearby areas, look no further. The team of attorneys at the Law Office of Nick Nemeth has extensive experience in handling unfiled tax returns and other IRS tax problems to help clients get favorable outcomes. To speak to one of our attorneys, call (972) 635-4098 or fill out our contact form, and we will take it from there.