Most people dread having to file their income taxes for the year. This is especially true for those who have complex returns. In an effort to simplify a complex return, some people might try to take the easy way out of certain aspects of the process.
As tempting as it might be to just do the easiest thing with your taxes, you could be hurting yourself. Be sure that you avoid these two common tax mistakes with complex returns.
Mistake 1: Failing to claim write-offs
Many filers are afraid of claiming write-offs because they believe that taking those increases their audit risk. While some write-offs may trigger an audit, there are many that don’t do this. As long as you’re able to back up your write-offs with proof that you can claim them, you should likely take them since they can reduce your tax liability.
Mistake 2: Not considering itemizing deductions
Some people avoid itemizing deductions because they don’t want to do the work of submitting proof. The issue with this is that many people can obtain a larger tax deduction by itemizing than they receive through the standard deduction. If you aren’t sure which is the better option for your situation, you can do the return both ways to determine which is better — even though that is more work.
Complex tax situations may require the help of an attorney familiar with tax matters. Getting this assistance early in the process may help you to avoid problems in the future. If you’re already having issues with the Internal Revenue Service, getting help is a top priority.