ON AIR NOW

LISTEN NOW

Weather

cloudy-day Created with Sketch.
53°
Overcast
H 76° L 60°
  • cloudy-day Created with Sketch.
    53°
    Current Conditions
    Partly Cloudy. H 76° L 60°
  • cloudy-day Created with Sketch.
    66°
    Afternoon
    Partly Cloudy. H 76° L 60°
  • partly-cloudy-tstorms-day Created with Sketch.
    73°
    Evening
    Sct Thunderstorms. H 76° L 60°
LISTEN
PAUSE
ERROR

Krmg news on demand

00:00 | 00:00

LISTEN
PAUSE
ERROR

Krmg traffic on demand

00:00 | 00:00

LISTEN
PAUSE
ERROR

Krmg weather on demand

00:00 | 00:00

The 5 biggest tax mistakes people make

Did you know taxes are due right around the corner?

Of course you did, and you're probably almost done preparing everything as well. However, before you file them away and checkmark that box off your to-do list, ask yourself one question — are you totally prepared to file?

We spoke with Thomas D. Fisher, CPA, LLC and asked: What are the top five tax mistakes people make every year?

Check out what he told us, and be sure to get your own ducks in a row before signing those magical slips of paper. 

1. Not contributing to 401(k) plans 

Forgetting to fund your 401(k) policy is a mistake for a number of reasons. For starters, if your company offers a match, deciding to not sign up means that you are actually leaving free money on the table. On the tax side of things, 401(k) contributions are taken from participants' paychecks before taxes are deducted, which means contributing to this type of plan will lower how much income you're required to pay taxes on.

2. Taking unnecessary withdrawals from retirement plans 
According to a new study, more than one in four households dips into retirement accounts like 401(k)s and 403(b)s for funding of things outside of retirement, despite the fact that doing so can cause some significant damage to those savings tax wise. According to the New York Times, the report, 'The Retirement Breach in Defined Contribution Plans,' found that withdrawals for non-retirement purposes by account holders under 60 amount to $60 billion a year, or 40% of the $176 billion employees put into such accounts each year..."

Their proposed solution? Hold off on funding retirement plans until you have an emergency savings account to pay for things that may unexpectedly come up. And if you're considering borrowing against retirement accounts to help fund college for your kid, you might want to think again. After all, your kids can always take out student loans for school — there are no such loans available for your retirement.

3. Not getting receipts for clothing donations to charities 

When it comes to making tax-deductible clothing donations to charity, keeping accurate records is key. Complete and accurate records can help speed up the process when it comes time to file and, perhaps even more importantly, will be what you'll need to fall back on should you ever be audited. In fact, H&R Block's Guide to Charitable Deductions claims that for deductions of less than $250 you should keep a receipt from the organization with the name and location of the charity, the date of donation and description of the property, as well as a photo of what you're donating. You might also keep notes on the fair market value of the property at the time you donated it and how you figured the value you're applying for a deduction for. 

Donations over $250 come with their own set of rules. See the full list of suggested documentation for donated items here.

4. Not considering the marriage penalty 
As my new husband and I recently discovered, sometimes there's a nice little price tag that comes with getting married, and it has absolutely nothing to do with paying for a pricey wedding. In a situation where both members of a couple work, that couple can most likely expect to owe more in taxes. Why is this the case? Once you earn above the 15% tax bracket, thresholds for higher tax rates are less than double the thresholds for single filers.

On the other hand, a marriage between two people where one person is not working could yield a marriage bonus, since working spouses can claim deductions and exemptions for non-working spouses and will be paying taxes at a lower tax rate overall.

5. Paying IRS notices without questioning 
Believe it or not, IRS employees are only human, and as such, they do make the occasional mistake. Before blindly paying out any amount that the IRS may tell you that you owe, it's a good idea to recheck your own numbers first. If you still feel you paid the correct amount of taxes, send a letter back and enclose all of your mathematic calculations.

Cheryl Lock is a personal finance writer at and former editor at LearnVest and Parents magazine. When she's not writing, she enjoys travel, which she blogs about at wearywanderer.wordpress.com.

(Source: Savings.com)

Read More
VIEW COMMENTS

There are no comments yet. Be the first to post your thoughts. or Register.

  • A pair of escalator mechanics have been arrested after police say they tampered with an escalator in the Langham Place mall in the Mong Kok area of Hong Kong, causing a dangerous situation. They were questioned after an incident in which the escalator abruptly changed directions, sending passengers plummeting to the ground floor of the mall. Eighteen were injured; one man was hospitalized in serious condition for a head wound. >> Read more trending news In a statement obtained by CNN, Otis Elevator Co. spokesperson Ian Fok called the arrest of its employees “a surprise.” He added, “Our legal team is working with law enforcement to clarify the situation and intends to defend our mechanics.” Video obtained by the South China Morning Post shows the moment the escalator changed directions, eliciting screams from dozens of people riding at the time.
  • A Canadian man will have to come up with a new vanity license plate, or decide to go with the standard tag, after he was told his plate could be misinterpreted. >> Read more trending news  Lorne Grabher has had his last name on his license plate for decades, but a few months ago received a letter from the Nova Scotia Registry of Motor Vehicles has canceled the plate after 25 years, CBC reported. That’s because others “can misinterpret it as a socially unacceptable slogan.” Grabher is now calling out Nova Scotia officials for discrimination. The Department of Transportation told the CBC via email that they received a complaint over the plate “as misogynistic and promoting violence against woman” and that they cannot mark that it is a name vs. an action. Nova Scotia has made about 3,100 words not acceptable for license plates including HESHE and GOD4U2.
  • The family of an American slain in last week's attack in London expressed gratitude Monday for the kindness of strangers as they insisted some good would come from the tragedy. Kurt W. Cochran from Utah was on the last day of a European trip celebrating his 25th wedding anniversary when he was killed when an attacker mowed down pedestrians on Westminster Bridge before stabbing a police officer in a Parliament courtyard. Cochran's wife, Melissa, suffered a broken leg and rib and a cut head, but is steadily improving. 'So many people have been so kind, and we are deeply touched by their goodness and generosity,' said Melissa Cochran's brother, Clint Payne. 'Your notes, prayers, donations and love have helped us so much.' Attacker Khalid Masood was shot dead by police after his deadly rampage, which police have revealed lasted just 82 seconds. Police believe Masood - a 52-year-old Briton with convictions for violence who had spent several years in Saudi Arabia - acted alone, but are trying to determine whether others helped inspire or direct his actions. Detectives on Monday continued to question a 30-year-old man arrested Sunday and a 58-year-old man arrested shortly after Wednesday's attack. Both were detained in the central England city of Birmingham, where Masood had recently lived. Meanwhile, the British government repeated calls for tech companies to give police and intelligence services access to encrypted messages exchanged by terrorism suspects.
  • Deputies were called to a Broken Arrow home Monday afternoon on a report of three people dead.  It happened near 91st and 241st East Avenue.  Investigators with the Wagoner County Sheriff’s Office say three masked people broke into the house.  Our partners at FOX23 tell us the homeowner allegedly shot all three defending himself.  
  • Three days after a GOP health care bill melted down in the U.S. House before a vote, the White House said President Trump is not giving up on his desire to overhaul the Obama health law, as Republicans in the Congress also urged the President to keep pushing ahead on major health insurance changes. “I don’t think it’s dead,” said White House Press Secretary Sean Spicer said of the failed GOP health bill, which foundered even after repeated efforts by the President to twist the arms of reluctant Republican lawmakers. “We’re at the beginning of a process. I don’t think we’ve seen the end of health care,” Spicer added, labeling the Obama health law, “an abysmal failure.” Spicer said the White House is currently going through a post-mortem on what went right and what wrong in their effort, as he said members of both parties in Congress had already reached out to both the White House and Mr. Trump about finding some common ground on health care policy. Spicer: Trump has received calls from Republicans and Democrats offering to work with him to improve health care https://t.co/ZQHMnWGI3O — CNN Politics (@CNNPolitics) March 27, 2017 On Capitol Hill, both parties were still sifting through the embers of the GOP health care bill, which was yanked off the House floor on Friday afternoon before a final vote, clearly short on support, as it divided Republicans along several fault lines. For many GOP lawmakers, the idea of giving up after just 18 days of work on health care changes, was not an option. “We cannot walk away now, without even a vote,” said Rep. Luke Messer (R-IN), a junior member of the House GOP leadership, said on the House floor. “I will continue to fight for a conservative bill to repeal Obamacare and rebuild a people-first health care system,” said Rep. Richard Hudson (R-NC). But there was no immediate signal on whether the White House or GOP leaders in Congress would look to tinker with the failed health bill of last week, or maybe start to develop a new plan.