NEW YORK (MainStreet) The problem with tax mistakes is that you just don't know you are making them. The income tax code has grown from just four pages in 1913 to more than 70,000 pages today and influences virtually every decision we make, according to The Tax Foundation, a non-partisan research think tank, based in Washington, D.C.
The IRS says the tax payer is responsible for everything on the tax return (and not on the return) and the tax preparer is responsible for anything he had knowledge of. So, if you don't tell your tax preparer all the details about how you earn money and how you save and spend money, he is not responsible for whether you could have paid less in taxes or gotten a bigger refund.
That got me wondering about some of the worst tax mistakes taxpayers make. So, I called up Steve Kunkel, Managing Director of CBIZ MHM, a Top 10 accounting and professional services provider.
Kunkel has more than 34 years of accounting and financial planning experience and told MainStreet that any one of these mistakes could cost you anywhere from hundreds to thousands of dollars.
1. Not keeping good records: People have a tendency to forget to tell their tax preparer things that have happened during the year and they don't really know what's important either, says Kunkel. Did you pay for a new professional subscription, have out-of-pocket medical expenses, fix the truck, incur any education expenses, get married or divorced, have a baby, sign a pre-nup? You need to tell your tax preparer all of these things so he can maximize your return. If you keep a folder of records of anything new in your life or that you spend money on throughout the year, you will have those important records handy, at tax time.