4 Tax Mistakes You Must Not Repeat In 2020

by Harley Green Accountant

Tax time is knocking the door, and you must be careful about it. You must avoid doing any mistakes which may attract IRS towards you. Facing the IRS can be a problem. If you are not comfortable with the accounts matter of your business, hire a professional accountant Venice. The accountant can help you in releasing the burden from your head. Further, they can prevent you from doing any mistake. Remember that doing any mistake or repeating it may result in further trouble. The current post is about some of the tax mistakes that you must avoid in 2020.

Not adjusting the withholdings with IRS

In the new withholding table, the IRS instructed the employers on how much tax they can hold back from workers' earnings. Many workers have since seen their weekly, biweekly, or monthly paychecks go up. However, people who didn’t adjust the withholding can face an unpleasant situation during the tax season.

If you owed money on your 2018 tax return but haven't since adjusted your withholding, then it pays to redo your W-4, which your employer should be able to provide you with. It is better to adjust the withholdings now. It will surely help you in your 2020 tax.

Not keeping the records of business-related expenses

Often the small business takes advantage of the deduction on the expenses they did to earn the money. You can take the leverage of this only if you keep proper records of your spending. However, an accountant Venice can help you in solving these situations.

They will properly maintain the book. Remember that filing deduction for wrong expenses not only stops your deductions but can also subject you to an IRS audit. Thus, as the year is starting, you better work on keeping the records properly. It will ultimately help you avoid any unpleasant situation.

Don’t hide the side income or freelance income

Doing freelance or side gigs are not an unusual matter in recent time. Several people are there who are working like this. However, remember that these are also income, and you must let IRS know of it. You're the one responsible for giving the IRS its share of your earnings. If you don't pay the IRS as you go, you'll risk costly penalties come tax time. Therefore, before it will happen to you, it is better to pay the quarterly taxes in April, June, and September of this year, and January of 2021.

Not taking the benefits of tax-advantaged plans

It is not that the IRS is there to take your hard-earned money from you. Several tax advantages are given by the IRS which people often fail to take advantage of. Retirement accounts like traditional IRAs and 401(k)s let you save pre-tax dollars aside for your future, while health savings accounts (HSAs) let you allocate pre-tax money for healthcare expenses. Failing to take advantage of these benefits lower the opportunities for savings.

Final Words

Therefore, over in this article, you have seen the mistakes that you must not repeat in 2020. If you are finding difficulties in tax preparation, take the help of an accountant Venice in this regard.