Taxes can be a frightening topic if you know you haven’t been fully handling your duties as a taxpayer. It’s easy to put off filing and accept the fate of paying late fees and penalties if you can’t afford to pay your tax obligation at the moment. Even if you do make an effort to pay on time, every time, there’s still the possibility that you could make a mistake that causes you to endure an audit or seizure of property or other troublesome proceedings. Fortunately, no matter how good or bad your current tax situation is, you can always get back on the right track and safeguard yourself from common mistakes by utilizing the assistance of a tax professional to avoid the following four kinds of tax-related problems:
1. Tax Liens
A state tax lien is a process through which the federal or state government can seize some of your assets or property in the event that you fail to pay taxes. If you operate a business or earn a lot of money and you file your taxes improperly for a couple of years in a row, you might miss a specific tax that you were supposed to pay but didn’t. In a case like that, you’d receive a Notice and Demand for Payment, at which point you would have no choice but to pay the tax debt or incur a state tax lien against a portion of your assets that is equal to the amount of the tax debt owed. If you also owe money to a creditor, a tax lien subordination gives the creditor the opportunity to move ahead of the IRS
2. Audits
An audit can be a stressful process because you never know how much you’re going to wind up owing or what the verdict is going to be. Studies have shown that people who use professional tax assistants and attorneys have a far lower chance of facing an audit than people who file their taxes independently. Plus, many tax professionals will offer a guarantee that promises they will pay any fees or fines incurred as a result of their wrongdoing, so in a way you remove much of the logistical liability that you would normally have if you chose to file your taxes independently using software like QuickBooks. If you end up owing more money than you can afford to pay, you should consider tax relief services.
3. Filling Out Forms Incorrectly and Missing Out on Deductions
As you may know, tax forms can be quite complicated and there are many different files to fill out. Even a single error could cause you to receive a revision request or a request for additional documentation. Furthermore, you could be missing out on tax deductions by not knowing all of your options.
4. Mathematical Errors
Finally, simple mathematical errors can cause tax problems and inconveniences because you’ll have to correct those errors and re-file. While having to re-file isn’t quite as bad as being audited or facing a tax lien, it’s definitely a burdensome enough process that you’d want to avoid it by any means possible. You may be confident in your ability to work a calculator, but there are often variables and factors involved that can be easy to overlook. Thus, leaving the advanced math to a professional is usually the best approach.
The Value of Outsourcing Tax-related Work
As you can see by glancing at the list of problems above, there are many different kinds of hassles and annoyances that can come from making a mistake on your taxes. Thus, the true value that you get from hiring a professional comes from the peace of mind that you get from knowing that there won’t be any unexpected issues popping up throughout the year. That convenience and assurance alone make tax assistance a worthwhile service to invest in.
