People may think it’s better to file taxes themselves, but even a little mistake could lead to big trouble. People who try to file their taxes themselves in California are often hit with penalties, cannot get their refund on time, or may be audited without warning.
Trying to deal with these problems without help from an expert may be risky. It is evident from real experiences that when someone self-files, they often make mistakes that could be avoided with the advice of a tax professional. Try to have a tax attorney in Encino who can guide you in these matters.
Tax Mistakes That Will Cost You Dearly
Without the help of experts, the possibility of making mistakes will be high. It will severely cost you. Keep reading to learn more about
a) Don’t Overlook Deduction
A freelance graphic designer based in Los Angeles used tax software and forgot to claim the particular home office deduction for California. The California method of calculating taxes is not the same as federal rules, and using the federal way may be mistaken.
Thanks to the expert advice, they wouldn’t have lost that money. Because they are not well aware of such rules, many in California tend to overlook tax-related savings like these.
b) Due to Incorrect Form
A local business owner in San Diego made the mistake of filing their taxes on the wrong form since they deducted their business vehicle. The mistake was picked up by the IRS, so the deduction was refused, and a $2,500 penalty plus interest was added.
It is common for California residents to make the same mistakes because they use incorrect forms for state adjustments, LLC fees, or the California Competes Tax Credit, but these errors can be avoided if they ask for help.
c) Calculation Error Can Trigger Audit Chances
Someone in a Sacramento family wrongly calculated their earnings, and this resulted in the FTB conducting an audit. The 20% penalty was given to them once the credit was canceled. A tax professional could have avoided the mistake that you made.
In the state of California, some people are audited because they have differences between their federal and state filings, high deductions for little income, or forget to report gig or rental earnings.
d) Other Tax Traps
A San Francisco freelance photographer was unable to pay their quarterly taxes since they did not realize California has that rule. That is why they were required to pay $3,000 in fines. Because of the higher taxes and specific deadlines in California, it is easy for those who prepare their own taxes to run into difficulties.
The right planning and help in time would have prevented the issue and made sure payments were handled correctly. Once you have got a Pasadena tax lawyer, you don’t need to worry much.
Reasons for Hiring an Expert
Professional tax preparers in California charge between $200 and $500, and the benefits are generally more than the amount you have to pay. They assist in gathering all possible credits and breaks so that you get the largest refund.
It lowers the chances of facing expensive penalties due to accurate and timely filing. Both offer the support of audit assistance, so you feel confident in case your returns are reviewed by the IRS or FTB.
