What are the biggest tax mistakes to avoid for a quicker tax refund

There are many reasons that a few months of extra income isn’t enough in most cases, but there is one factor in particular where the answer can make or break your tax return. If you owe $10K or more in estimated taxes owed for 2020, according to IRS estimates, it will be impossible to get all of the funds you owe back from federal benefits. Rather than spending time preparing taxes, here’s what to do instead:

Get Your Taxes Paid On Time

Tax season has already started! But even though we have an extra six months of being able to claim our refunds, you should still be doing everything possible not only to get them, but also to start receiving and using those refunds as soon as possible. This process can seem like too much work, especially when compared with others who may have less trouble. But taking the right steps now will help get your returns paid faster, which means you won’t waste precious time planning ahead.

Claim As Much (and Slowly) as You Can

The simplest way to avoid any delays in getting your refunds, aside from filing early for every payment, is by claiming as much, as efficiently as possible. In general, paying off small amounts first and then moving on to large ones will allow you to receive larger payments later. That said, don’t assume that this tactic will be able to completely cover your short-term tax obligations. While making sure you claim your estimated payments quickly will help reduce any potential problems with the IRS, you should also take care to verify and report any errors in your records. Getting paid sooner rather than later is important, because even some of the largest companies can experience delays.

Don’t Expect Your Filing Season to Start Until June 20th or Later

If you think it may be more than three months before you expect your filing season to kick off, then that’s probably not how it should have started. Even though we’ve had over 12 months of open filing season, there have been reports that some employers could decide to delay reporting employee expenses to their tax preparers due to concerns. This problem may persist after April 15th to May 31st, so you best plan ahead and check with your employer to see if it would extend their filing deadline or schedule it at a different date. We recommend keeping track of your actual income tax deductions while working with your financial institution to figure out what adjustments or credits are available. Not only does this ensure you’ll be able to claim the full amount of your tax allowances as quickly as possible, but you can use your refund and credit card balances for future tax filings as well.

Be Flexible With Your Reporting Periods

The longer you wait to make claims for expected expenses, the bigger this impact of late filing will become. After all, the government will often begin taxing your wages on July 1, 2021. Once the clock strikes midnight on December 31st, however, you might become “suspicious about waiting to file taxes, since you haven’t filed anything for 2019 yet. Perhaps you did file taxes but have avoided figuring out how to treat these claimed tax credits. Before you run through your recordkeeper, your accountant, or accountant, remember that the IRS often files two forms with information about both your reported income on its Form 1040 and your expected tax-related costs on Form 8926, depending on how long you waited to file. So, be flexible and keep track of everyone’s incomes right away, no matter when they filed. When you catch up, you can make certain to submit the correct form, as required by the law. And don’t forget to include any new items of income such as tips or reimbursements on Form 8926. Be careful about including incorrect amounts or overpaying, just to be on the safe side if ever the IRS catches you. It’s your responsibility to show good faith and comply to the rules.

Get Tax Prepared Early

It’s going to take some preparation, but there are methods to do away with some of the hassle. Many people feel unprepared for the upcoming tax season because they didn’t prep well in advance. However, it shouldn’t matter if you missed a key step in your business’ tax preparation process. You can take advantage of advanced tax preparation services, like FreshBooks or TurboTax, for example, and save even more time. Plus, they provide expert knowledge in all areas related to tax filing, saving time you wouldn’t spend researching, consulting, or writing about each area. These tools make your life easier by automating many of the steps involved in an efficient tax preparation process. They’re also likely better prepared for things to go wrong that you would face at tax time.