USF Professor Amanda Dore Outlines Five Tax Mistakes to Avoid

Tax filing season is here, and many people are eager to get their tax filing completed. Before rushing into anything, University of St. Francis visiting professor Amanda Dore, MBA, CPA, has a few tips for making sure your tax return is completed correctly, saving you the headache of amending the return later and the heartache of paying fines. Brush up on your tax filing knowledge before filing!

1) Filing Too Early

Employers have until January 31, 2019 to mail W-2s & 1099s. This means that you can be receiving tax documents during the first week or so in February. Sometimes, people are too eager to get their refund and will file before they have all of their information. Waiting a week to file is better than having to amend a return.

2) Withholding the Wrong Amount of Withholdings

Make sure that you fill out your W-4 correctly so that you don’t have too much or too little being taken out for taxes during the year. Having too big of a tax refund only means that you gave the IRS an interest-free loan during the year. Owing too much may cause a penalty if you didn’t have enough withheld during the year.

3) Mismanagement of Retirement Plans

There are many different tax benefits to saving money for retirement, based on the type of account and your income level. Take advantage of these tax savings and help secure your future. Do not take an early withdrawal from your retirement plan, as you will be subject to fees, which means you’ll end up with less money.

4) Paying a Preparer for a Simple Return

If you have a simple return, educate yourself! You can file your taxes for free on your own. There are many websites that allow you to file simple returns for free, and they will even walk you through the process. Low-income families can take advantage of VITA sites like ours at USF (we are offering free tax preparation and electronic filing through April 2019). If you own your own business, or have complicated returns, find a reliable accountant that you can trust and go back to every year.

5) “Blowing” Your Refund

Some people are tempted to spend their refunds on a large purchase or vacation, but it is more beneficial to save this money! Ideally, you should have six months’ worth of expenses in your savings account. Consider this your “rainy day fund” in case something unfortunate happens, such as losing a job or having unexpected medical or home expenses pop up. Resist the urge to treat yourself!

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Amanda Dore is a visiting professor at the University of St. Francis. She has a bachelor’s degree in accounting and an MBA– both from USF. She is also a certified public accountant and is the site administrator for USF’s VITA tax site. She is a member of the Illinois CPA Society (ICPAS) and AICPA (the American Institute of CPAs). This is my professor Dore’s third year teaching at USF.