By National Association of Enrolled Agents, Special for USDR
A new survey conducted by the National Association of Enrolled Agents (NAEA) revealed some the most common mistakes made by individual filers and small businesses during tax season. Survey results show that when individuals and small businesses alike take it upon themselves to file their taxes, opportunities for deductions are missed, inaccurate information is filed and the potential to leave money on the table rises.
This survey comes at a critical time of year with the April 18 deadline looming and with countless returns that still need to be filed. According to the most current available data from the Internal Revenue Service (IRS), the number of individual returns reached upwards of 148 million in the 2015 filing year.
Here’s a look at the top three avoidable mistakes enrolled agents (EAs) see year after year in the sprint to the tax deadline:
- Disorganization: Nearly two in five respondents (38%) say that when filers seek help from licensed tax professionals, they lack the appropriate documentation.
- 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.
- 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.
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
Copyright © 2021 | USDAILYREVIEW.COM - All Rights Reserved