Tax time can be stressful, especially in California with its unique tax laws. Here are some common mistakes Californians make on their tax returns, so you can avoid them and save yourself money and a headache:
- Math Mistakes: Not So Elementary
Even the best of us can make typos or miss a decimal point. Double and triple check your math on your return. If you’re using tax software, take a final look after it finishes the calculations.
- Missing Out on Money: Forgetful Filer
California offers many deductions and credits that can lower your tax bill. Make sure you claim all the ones you qualify for. Check the Franchise Tax Board (FTB) website for a list of current deductions and credits.
- Misunderstanding “Gross”: Money In vs. Money Out
When filing taxes, “gross income” means all the money you made before taxes are taken out. Don’t forget to report things like side hustle income or unemployment benefits.
- Paper Chase Problems: Lost Receipts, Lost Refunds
Keep good records of your income and expenses. If you get audited by the FTB, you’ll need to prove your tax return is accurate.
- Filing Late: The Penalty Postponement
California has filing deadlines just like federal taxes. Missing the deadline can lead to penalties and interest. File on time or file for an extension if you need more time.
- DIY Disaster: Going it Alone When You Shouldn’t
Taxes can be tricky, especially in California. If you’re unsure about something, consider hiring a tax preparer or accountant. They can help you avoid mistakes and ensure you’re getting all the deductions and credits you deserve.
By following these tips, you can avoid common California tax mistakes and file your return with confidence. Remember, the FTB website has a wealth of information to help you file your taxes correctly. Don’t let tax time get you down!