What is the one season that people absolutely dread? It’s not winter, summer, autumn or spring: it’s tax season. When it comes to taxes, most people have issues understanding a great deal about them. Filling taxes, preparing for filing of taxes, and understating the amount of taxes that should be paid are all aspects of taxes that continue to be ambiguous for a large number of people.
Taxes are the national responsibility of every citizen, yet with ambiguities such as these, most people are left scratching their heads with respect to several aspects of it. Are you afraid of asking tax questions? Here is a list of a few frequent tax questions and the answers to each one.
Does filing early have benefits? What are the disadvantages of filing after the deadline?
Filing your taxes early is recommended. When it comes to filing taxes, the earlier you can get them filed, the better off you’ll be. Another legitimate advantage is you are likely to pay lower fees for the services of a CPA regarding tax filing instead of the premium that you would need to pay in the time in and around the tax filing deadline.
As far as filing late is concerned, this can be easily be avoided by asking the IRS for an automatic extension. If you are unable to ask for one though and happen to be late in filing your taxes beyond the deadline, you are likely to be a subject of fines and higher interest charges by the IRS authorities.
The most important thing to remember about filing an extension is that if you owe and you file an extension, you will still incur penalties and interest. An extension of time to file is NOT an extension of time to pay and is a very common misunderstanding when it comes to filing a tax extension.
Can a married person file their taxes separately?
This one of the most heavily asked questions. When couples decide to marry, one of the primary tax questions in their mind is regarding their tax filing statuses now that they have married. As far as the answer to the question is concerned, any person (irrespective of their married status) can file for taxes separately.
However, it’s important to note that for couples, filing taxes jointly can have advantages that you are unlikely to get in separate filing. One of the primary advantages they get is the increase in the amount of standard deduction that they can avail in addition to being able to take multiple tax credits.
How can I determine if I need an accountant?
The answer to this tax question is likely to have different answers for everyone. The need for an accountant primarily depends on a host of financial factors in your life and the level of complexity of your finances. (Check out our blog post, What is a CPA?, for more helpful information.)
The most common instances where people are likely to need the services of an accountant are places where there has been a change in your life and financial situation, you are in need of itemizing your deductions, and you handle complex stock and investment issues in your professional career.
There is no such thing as a dumb question! If you have questions about your taxes or are in general need of accounting guidance, feel free to contact us today!