A TAX expert has shared that boosting your 401k contribution is among the best ways to reduce the tax you pay, ahead of the upcoming filing deadline.
With the late tax filing cut off day fast approaching, registered accountants have shared their do’s and don’ts to make the filing process easier.
Sheri Fiske Schultz, Managing Partner at Fiske and Company, says taxpayers should keep good records throughout the year[/caption]
Final October 15 deadline for tax returns is fast approaching[/caption]
Tax season can be a difficult time, but being properly informed can make it smoother.
While the Internal Revenue Service’s April 15 cut-off date for tax returns has passed, some taxpayers may have filed an extension to have more time to compile their claim.
The final cut off date for the extended deadline is October 15.
Business owners and workers must ensure all their documents are up to date, according to licensed tax professionals.
Sheri Fiske Schultz, a certified public accountant and managing partner of Fiske & Company, said taxpayers should keep their records straight throughout the year to avoid any trouble.
They should also be aware of their deductions, especially business owners to ensure they claim for things like office supplies and travel
Consumers should keep all records for medical expenses and mortgage interest to ensure they are not double taxed.
Schultz also urged people to get professional help when needed, and try not to ignore taxes.
She also said people should be honest about their income, because underreporting can lead to audits and hefty fines.
Chris Rivera, founder of Ecommerce Accountants and licensed CPA, said taxpayers should double check their tax return for accuracy, which is especially critical for people filing last minute.
“Double check personal details, Social Security numbers and account numbers as mistakes can lead to processing delays,” Rivera said.
“Rushing through your return increases the likelihood of mistakes, which can lead to rejected returns or an IRS audit.
“Take the time to review before hitting submit.”
DON’T DELAY
Wolters Kluwer Tax & Accounting principal federal tax analyst Mark Luscombe said anyone who is unable to pay by the October 15 deadline must contact the IRS to try to work out a compromised arrangement otherwise interest and penalties will be incurred.
However, taxpayers impacted by recent hurricane events including Helene and Milton may be able to get a further filing extension.
“Filing by October 15 with an extension on file will avoid a failure to file penalty,” Luscombe said.
“If taxes were not paid by April 15 and throughout the prior year through withholding or estimated tax payments, a failure to pay penalty may be imposed by the IRS.”
LOWER YOUR LIABILITY
Experts also suggested increasing the amount of money you contribute to your 401k through your job.
By putting more money away in your 401k, taxpayers can decrease their taxable income resulting in an lower tax liability overall.
Taxpayers should also get familiar with IRS.GOV which has a wealth of information as well as up to date press releases.
The IRS also has an interactive tax assistant to help navigate tough questions.
