Filing your income tax returns can feel overwhelming, especially with the maze of forms, deductions, and deadlines. Whether you’re an individual filer, a freelancer, or a small business owner, even small mistakes on your taxes can lead to penalties, delays, or, worst of all, a tax audit.  To help you successfully handle your taxes and avoid unnecessary stress, we’ve outlined the most common mistakes taxpayers make when filing their income tax returns—and how to avoid them. 

Filing Your Taxes Late or Missing the Deadline

Errors in the Basic Information Section

Believe it or not, some of the most common tax errors come from simple mistakes, such as entering incorrect Social Security Numbers (SSNs) or failing to sign your return. Errors on your personal or business income tax returns can delay processing or even result in rejection. Before you hit the 'submit' button, make sure to review the information you've provided throughout your tax documents.

Missing Deductions and Other Credits

Deductions and credits are the best tools for reducing your tax liability, but they’re often underutilized. Missing out on these opportunities means paying more than you owe. Such deductions can include your home office or filing any personal property utilized to complete your job, student loan interest, child tax credits, energy-efficiency home improvements, startup costs, and more.

Overlooking State Income or Self-Employment Tax Filing Requirements

State income tax returns are just as important as federal filings. However, many taxpayers either forget to file state returns or assume that the process is identical to federal tax filing. The requirements and deductions for state returns vary by location, with Columbia, SC, having its own rules. If your state income tax return isn’t filed correctly, it could mean penalties down the road. 

Freelancers and small business owners are often surprised by the additional taxes they owe. Along with federal income taxes, self-employed individuals must pay self-employment taxes, which include Social Security and Medicare contributions. Ignoring these taxes leads to underpayments and potential penalties.

Not Getting Professional Tax Assistance

Tax professionals have the expertise to identify deductions and credits, handle state income tax returns, and assist with challenges like audits. If you’re based in Columbia, SC, National Tax Service is here to help you! Whether you're a solo freelancer or a small business, we provide bookkeeping and payroll services, in addition to providing tax preparation and audit help. Contact us to learn more!