We’re in the heat of tax filing season. What mistakes should New Yorkers make sure they avoid?
1. Don’t Tap Your Retirement Accounts
When money is tight many consider tapping into their IRAs or 401ks for extra cash. That can get extremely expensive. The custodian may charge fees for closing accounts, fees for purchasing stocks will be lost, and there can be sizable tax penalties on top of that. Instead consider borrowing or rolling over an account to a self-directed plan. This can avoid the fees and maintain gains.
2. Don’t Overlook Deductions
The tax system is complicated for a reason. That’s to make it difficult to actually take advantage of all the promised breaks. Find a tax preparer or accountant to help. They normally won’t charge unless you actually use their calculations to file, and they are saving you money.
3. Don’t Skimp on a Specialist Accountant
Going to an accountant who actually specializes in your situation can make a massive difference. That applies to type of work and business, as well as investments. For example; if you invest in mortgage notes, most regular tax preparers may not know how to correctly calculate income; causing you to pay far more than you should.
4. Don’t Fail to File an Extension
Rushing your tax returns is always a bad move. If you aren’t prepared, and need more time, then absolutely file an extension and do them right. It can mean thousands of dollars in difference.
5. Don’t Fail to Challenge Your Property Taxes
One of the most significant and direct differences in your wallet this year will be how much you pay in property taxes on your NY home. If you haven’t yet; challenge those over blown bills with the help of a local property tax adjuster.
6. Don’t Neglect the Time to Plan
So few individuals actually take the time to come up with a tax plan. This costs them thousands if not tens of thousands a year. Talk to a tax professional, find out how to keep better records, set yourself up for breaks, and then actually look forward to tax time next year.