Are you doing everything correctly when it comes to your taxes?\u00a0 It\u2019s easy to make tax mistakes that can cost you hundreds or thousands of dollars on your tax return.\u00a0 The good news is many of these tax mistakes are avoidable.\u00a0 Let\u2019s look at 8 common errors you’ll need to dodge this year.<\/p>\r\n\r\n\r\n\r\n
One of the first steps in preparing your tax return is choosing your filing status<\/a>.\u00a0 Taxpayers have the option of filing Single, Head of Household, Qualifying Surviving Spouse, Married Filing Separately or Married Filing Jointly.\u00a0 It\u2019s important to know which one is right for you because it will determine your standard deduction amount, which credits you qualify for and your tax liability.\u00a0 If you\u2019re unmarried and taking care of a child or an aging parent, filing as head of household instead of single will entitle you to a higher standard deduction.\u00a0 Although married couples<\/a> can file joint or separate returns, it\u2019s much more beneficial to file together.\u00a0 When you file separately, you\u2019ll pay more taxes and be ineligible for popular tax breaks like the earned income credit and student loan interest deduction.\u00a0 ezTaxReturn.com<\/a> can help determine your correct filing status when you do your taxes with us.<\/p>\r\n\r\n\r\n\r\n Everyone needs to save for their future and one of the best places to park your cash is in a tax-advantaged account.\u00a0 When you contribute to your employers 401k<\/a> or a traditional IRA<\/a>, you reduce your taxable income dollar for dollar.\u00a0 Therefore, you’re making a huge tax mistake by not maxing out the account.\u00a0 Most people can contribute up to $22,500 to a 401k for 2023.\u00a0 However, those closer to retirement (age 50 and up) can contribute an additional $7,500 towards the account.\u00a0 The contribution limit for an IRA is $6,500 ($7,500 if you\u2019re age 50 or older).\u00a0<\/p>\r\n\r\n\r\n\r\n Not everyone is interested in working a traditional 9 to 5.\u00a0 Some workers prefer to freelance and be their own boss.\u00a0 When you work as a freelancer, taxes typically aren\u2019t withheld from your pay, but you\u2019re still responsible for making sure Uncle Sam gets his fair share.\u00a0 If you anticipate owing more than $1,000 in taxes for the year, you must make estimated tax payments<\/a>.\u00a0 They are due in April, June, September and January.\u00a0 Fail to make your payments and you\u2019ll be handing over a large chunk of your earnings at tax time.<\/p>\r\n\r\n\r\n\r\nNot contributing to a 401k or traditional IRA<\/strong><\/h2>\r\n\r\n\r\n\r\n
Failing to pay your estimated taxes<\/strong><\/h2>\r\n\r\n\r\n\r\n