Tax Experts Share 11 Things They Wish You Knew Before Filing

Tax season might not be the most wonderful time of the year. But taxpayers can’t skip filing their taxes. As you get around to handling this task, tips from tax experts can help you avoid unnecessary hassle.

Taking a look at these tax filing tips now might help lower your financial stress as you wade into filing your taxes.

Although tempting to only report some of your income, the tax code requires you to report all of your taxable income, even if you didn’t receive a 1099.

“Some taxpayers misguidedly believe that if they, say, didn't receive a 1099 for work they did as an independent contractor that they don't have to report it on their tax return,” says Logan Allec, CPA at Choice Tax Relief.

Allec continues, “This is not true; the law is clear; you must report all taxable income you received, whether you were issued a tax document or not.”

When filing your taxes, you might hope for the largest refund possible. But a bigger refund doesn’t necessarily mean your preparer did a better job.

“Some tax filers mistakenly believe that the larger the tax refund, the more competent the preparer,” says Allec. 

“You could have the most incompetent tax preparer in the world — who missed several credits and deductions for you — but if you filled out your Form W-4 in such a way that taxes were grossly withheld from your paycheck, you would still likely get a large refund.”

Conversely, Allec explains, you might owe taxes if you neglected to have the correct amount deducted from your paycheck — regardless of your tax preparer’s skill.

If you make a mistake on your tax returns, it’s not the end of the world.

“Let's say you file your tax return, and the next day you get a corrected tax form (such as a corrected W-2 or 1099-B). This means that the tax return you filed the previous day was likely incorrect,” says Allec.

While you will have to correct your return, you don’t need to file an amended return, Allec explains. You can just file a superseding return, whether paper or online, as long as you get it in before the tax deadline.

The tax code isn’t static. Instead, the rules can change every year.

“Stay informed of tax law changes,” says John G. Adams, CPA and owner of Bridgewater Tax and Financial Consulting. “Every year, the tax laws change the amounts for certain deductions, such as the mileage deduction.”

Tax credits and deductions can lead to significant savings. But you’ll need to know about these opportunities or work with someone who knows the rules to take advantage.

“Figuring out the tax credits and deductions you qualify for. This requires excellent research skills. It is not just about knowing the rules but also the exception of the rules,” says Adams. “This is where using a tax professional to prepare your taxes may be helpful. Some of the videos you watch on Facebook reels or TikTok do not always give you the whole story.”

Many people miss out on valuable credits and deductions, like the Child Tax Credit or the Earned Income Tax Credit, because they don't fully understand eligibility requirements.

Although tax filing happens once each year, the decisions you make throughout the year impact your taxes. With that, planning for the year ahead is always a good idea.

“You should focus on tax planning, which happens throughout the year, rather than just tax filing,” says Adams. “Tax filing is based on what happened last year. Tax planning is what you can do now and in the future to legally minimize your tax bill.”

Although most celebrate getting a tax refund, it’s not necessarily a great thing.

“A refund isn't free money. It's a loan you gave the IRS,” says Stephen A. Weisberg, principal attorney and founder at The W Tax Group. “Getting a refund means you gave the IRS an interest-free loan all year when you could have been using that money to pay for household bills or even investing it!”

If you discover that you owe more than you can pay now, don't panic. Instead, look for solutions.

“People assume if they can’t pay, they’re stuck. Not true,” says Weisberg. “The IRS offers installment agreements, hardship status, and settlements — but they don’t make it easy, and they won’t tell you the best option for you.”

Weisberg adds that a partial payment is better than nothing, given that the failure-to-pay penalty is 0.5% per month.

Staying on top of all relevant income and expenses throughout the year is important.

“It’s not about amassing a mountain of receipts but presenting them in an organized, meaningful way,” says Chad D. Cummings, Esq., CPA at Commings & Cummings Law. Cummings instead recommends creating detailed logs with dates, amounts, and context.

“This targeted approach helps your preparer identify valid deductions and avoid unnecessary red flags,” he explains.

Missing a tax deadline can lead to penalties.

“File and pay your taxes on time (including extensions) to avoid paying penalties and interest,” says KPMG Private Enterprise National Tax Leader Tracey Spivey.

If you want to bump up your retirement savings, you can continue making 2024 contributions until your tax return is due in 2025.

“Increase retirement account contributions to reduce taxable income,” says Spivey. “Many of these can be still be deducted on your 2024 tax return even if paid in 2025 by your 2024 tax return due date.”

Filing your taxes can come with a feeling of dread for many, especially if you are trying to get out of tax debt.

Staying on top of your finances can help you enjoy a smoother tax season this year. If you need help, don’t hesitate to work with a tax professional to streamline your tax filing.