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Avoid common tax filing mistakes

As 2014 opens, many people are beginning to receive tax forms in the mail from employers. As people prepare to file their income taxes, they should be aware of some of the most common errors that people make when filing their taxes and how to avoid them.

Failing to file

Some people who are struggling financially fail to file income tax returns at all, since they do not have the money to pay the taxes they owe. However, by failing to file, they are increasing their potential problems, as well as the money they could end up owing in penalties. The I.R.S. assesses penalties for both failing to file income tax returns as well as unpaid taxes. People who are already financially strapped end up making their situations worse by incurring more fines from the I.R.S. when they both do not file their income tax returns and do not pay their taxes.

People who are unable to pay their taxes should file income tax returns and reach out to the I.R.S. to inquire about installment payment plans, offers in compromise or other agreements to delay paying.

Ignoring I.R.S. communication

Those who have made tax mistakes in the past such as failing to file or not paying fully may be tempted to ignore letters from the I.R.S. Some believe that if they simply ignore the communication, the problem will go away. However, those who owe the I.R.S. money could be subject to a federal tax lien that attaches to all of the property they currently own, such as houses, other real estate, cars and boats. Tax liens also attach to property people acquire in the future. After such a lien has been filed, the I.R.S. has the right to seize any property to which the lien is attached and sell it to satisfy the debt.

People should read all letters from the I.R.S. and take steps to reach payment agreements to satisfy unpaid tax debts before it gets to the point where the I.R.S. files a lien.

Calculation errors

According to the I.R.S., numerous taxpayers make simple transcription and calculation errors when filing their income taxes that could be avoided by going slowly and double-checking work. Mathematical errors, errors in selecting filing status, errors in amounts of allowable deductions, improper or missing Social Security numbers and improper bank account numbers are common on tax returns. Such errors at the very least can delay income tax return payment, and can lead to I.R.S. audits if officials believe that taxpayers are intentionally trying to underpay.

Tax laws are complex, and there are numerous ways that people can unintentionally violate these laws. Those who have tax issues should seek the assistance of a skilled tax attorney with a broad range of experience representing people in Tax Court and negotiating with the I.R.S. who can help resolve the matter.