Conquer Tax Season Fears with Tips from a Financial Advisor

Most people dread tax season, and many share common anxieties about filing their returns and getting them accepted. While these concerns are understandable, the top five tax-related fears are often more worrying than they need to be.

1. Fear of Being Audited

While audits can seem intimidating, only around 2% of tax returns are audited each year. Audits are randomly selected, meaning you aren't being specifically targeted.

Some taxpayers might have a higher chance of being audited. But, if you are selected, you will get plenty of notice. You also have the right to have a tax professional or attorney guide you through the process.

2. Fear of Making Mistakes

You might be surprised to learn that the IRS generally doesn’t penalize honest mistakes. If an error significantly affects your return, you may need to file an amended version. In such cases, your tax professional can contact the IRS to explain the situation. The IRS may even waive penalties if the mistake was unintentional.

3. Fear of Claiming Large Deductions

Many taxpayers hesitate to claim all the deductions they’re eligible for, fearing it will trigger an audit. The tax code has many deductions. If you miss them, you might pay more than you need to. If your deductions are valid and properly documented, you should take full advantage of them.

4. Fear of Not Being Able to Pay

If your tax bill exceeds your available funds, there’s no need to panic. The IRS offers payment plans to help taxpayers manage their balances over time. In some cases, you may even qualify for an Offer in Compromise, which can reduce the amount you owe.

It’s important to file your taxes on time, even if you can’t pay the full amount. You should also work with a tax professional to explore your payment options.

5. Fear of Receiving IRS Letters

Getting a letter from the IRS can be nerve-wracking, but it’s important to open it right away. The message might be a simple request for missing paperwork. It could also be a notice about a change to your refund or tax balance. Since many IRS letters come with deadlines, addressing them promptly can prevent bigger issues later on.

Bottom Line

Tax season can bring stress, but understanding these common fears can help ease your worries. With proper preparation, the right guidance from tax professionals, and a proactive mindset, you can navigate the process confidently. Most concerns are manageable. By staying informed, you will be better prepared to handle any challenges that arise.

Sources:

https://rueassociates.com/blog/overcome-these-top-5-tax-fears/

Disclosures:

This information is an overview and should not be considered as specific guidance or recommendations for any individual or business.

This material is provided as a courtesy and for educational purposes only.

These are the views of the author, not the named Representative or Advisory Services Network, LLC, and should not be construed as investment advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. Please consult your Financial Advisor for further information

Advisory Services Network, LLC does not provide tax advice.  The tax information contained herein is general and is not exhaustive by nature.  Federal and state laws are complex and constantly changing.  You should always consult your own legal or tax professional for information concerning your individual situation.