These Mistakes Cost You Time and Money

Here’s a look at the top three avoidable mistakes enrolled agents (EAs) see year after year in the sprint to the tax  deadline:

1. Disorganization: Nearly two in five respondents (38%) say that when filers seek help from licensed tax professionals, they lack the appropriate documentation.
2. DIY Tax Software: One in three respondents (33.6%) indicated that leaning on DIY tax software can lead to common tax filing mistakes like overlooking opportunities for deductions and/or claiming inaccurate tax deductible income.
3. Procrastinating: Almost a quarter (23.5%) of member enrolled agents at NAEA said that filers often procrastinate until the last possible second, and to make matters worse, when they find out they owe, they choose not to file.

“As tax preparers, we know that all too often people wait until the last minute and rely on one-size-fits-all shortcuts to file their taxes,” said James R. Adelman, EA, President-Elect of the National Association of Enrolled Agents. “This combination leads to missed deductions, leaving money on the table, and errors that could lead to future IRS audits. There is no cookie-cutter method for filing taxes, and securing the help from a licensed professional like an enrolled agent is the best way to save time and money now, and avoid headaches  later.”

Tax Return Do’s and Don’ts for Small Business  Owners

According to the Small Business Administration, approximately 543,000 new businesses get started each month. Small business owners are among a class of taxpayers whose finances are much more complex and, therefore, require special attention. More than 90 percent of survey respondents agreed that taxpayers starting a new business should seek professional help from an enrolled agent during tax season. Not unlike individual filers, small businesses can fall victim to the same common mistakes during tax season, only these mistakes are much more  costly.

More than half (58 percent) of enrolled agents indicated that the single biggest problem plaguing small businesses is lacking detailed (and accurate) records, specifically when it comes to mileage logs for business  vehicles.

When to Hire an Enrolled  Agent

Aside from filing as a small business, survey respondents indicated that certain life stages are more likely to require the help of a licensed tax professional, like an enrolled  agent.

Managing a family member’s estate (78%), change in marital status (72%), expanding an existing business (67%), buying a home (60%) and becoming a new parent (42%) are among the top life stages for which enrolled agents recommend filers seek professional help with  taxes.

Enrolled agents are America’s tax experts, and they are the only federally-licensed tax practitioners who both specialize in taxation and have unlimited rights to represent taxpayers before the Internal Revenue Service. To find an enrolled agent in your area, visit  taxexperts.naea.org.

Survey  Methodology:
The online survey conducted by the National Association of Enrolled Agents took place from March 9 to March 20, 2017, and yielded responses from 519 of its member agents, most of whom have more than 15 years of  experience.

About the National Association of Enrolled  Agents
The National Association of Enrolled Agents (NAEA) is the organization powering enrolled agents, America’s tax experts®.  NAEA is a non-profit membership organization composed of tax specialists licensed by the U.S. Treasury Department. NAEA provides the networking, educational opportunities, programs and services that enable enrolled agents and other tax professionals to excel beyond their peers. Enrolled agents are the only federally-licensed tax practitioners who both specialize in taxation and have unlimited rights to represent taxpayers before the Internal Revenue Service. To find out more, visit www.naea.org and follow NAEA on Facebook and  Twitter.

SOURCE National Association of Enrolled  Agents