By now you've learned a lot about money and taxes.
You could be an expert.
But what happens if you make a mistake?
Today we're uncovering the common tax mistakes people make and how to fix them.
And we're also going to hear from our tax experts
about their top tips to help you move forward.
You know, even I've made some mistakes in my lifetime.
When I first started my business,
I didn't realize I had to pay quarterly taxes.
So when I filed my tax return, I got hit with this huge tax bill
I didn't prepare for.
But with any mistake I've made in my lifetime,
I've learned it doesn't help to panic.
But instead, stay calm
and then learn so it doesn't happen again in the future.
Today we will have questions from Naj and Mykala.
And to help us better understand them,
we have our tax experts with their explanations.
Not filing your taxes.
The IRS does not care how young you are.
If you owe taxes, you must pay.
Filing a tax return without all of your documents.
Not keeping track of your income,
your 1099s, your W-2s.
People think like, "Oh, can I just go back and add it?"
No. It's already been sent to the IRS,
to the state if you have to send it to the state.
You would have to amend your return
and send it in via the mail and it's a to do.
With my accountant, you know, I interviewed a few people.
I asked for recommendations.
Making sure that she was a certified tax preparer.
I worked with someone who wasn't
and I literally paid for it.
They got me this significant refund,
and it turns out I wasn't eligible for any of that refund and I had to pay it back.
Not keeping any receipts, not a good idea.
You never know. Bring it to your tax professional.
You might be able to deduct it and get more money back
or your return or owe less.
Do not juxtapose numbers.
There's a big difference between 6,000 and 9,000.
And it's more than just a flipped upside down six.
Organizing tips that I use throughout the year
are labelling every single one of my receipts that I ever get,
whether I need them or not just 'cause
maybe I'll use them, maybe I'll need them, maybe I won't.
Flip it over, write who,
what, when, where,
why is this expense taking place and how much it is.
Put things in an Excel spreadsheet monthly.
If you get your receipts emailed to you,
have a folder that's specific to receipts.
Treat this like the biggest party you've ever planned.
What are the colors, who's going to be there,
what's the food? Plan your tax life
so that you can keep more of your hard-earned money in your pockets.
This year, there are no penalties for not having health insurance.
There is no penalty for the feds, but there will be a penalty for the state.
The W-4 election process has changed.
You can no longer get a sheet of paper,
fill it out, and just turn it in.
You must use the W-4 calculator
that you can find at irs.gov.
If you have any life changes, you had a child,
you moved, you want to update that information.
According to the answers that you provide,
then your company will withold more or less taxes.
I'm here with our experts again.
Thank you for joining us, ladies.
Lauren, Lynn, and Melissa.
- Thank you. - Thank you.
All right, so we have some more taxpayer questions.
- You ready for them? - Yes.
- Absolutely. - All right, first one is from Naj.
Hi, I'm Naj. I'm 24 and I'm a IT engineer for Vice Media.
I used the 1040 form on the IRS website
and wanted to double check that I filled out everything correctly.
What are some of the most common mistakes that I should be aware of?
Great question, Naj, and that 1040 form
does have a lot of ins and outs,
so I'm glad we have our experts to help you with the answer.
Lauren, what would you say in this situation?
So, Naj, I'll keep it very simple for you.
Some of the most common mistakes that I've seen
are that they've either transposed a number
in their Social Security number,
they screw up something with their address or within their name.
And then especially if you're owed a refund,
make sure your bank account information is correct
because, God forbid, that money goes into someone else's bank account.
It's going to be very difficult to get back.
Oh, wow. I can't even imagine.
Yeah. I have seen it happen.
Get that back after it went to the wrong account.
- Yeah. - All right, Lynn,
would you have anything to offer?
Make sure the numbers are correct
for the income or the expenses or the deductions.
It sounds like probably just have a fresh pair of eyes
review everything before you submit it would be the final step.
- Yes, absolutely. - Definitely.
Let's more right along to our last question from Mykala.
My name is Mykala Williams. My pronouns are she, her, hers.
I'm 24 years old, and I'm from Los Angeles, California.
I work in video production. It was such a pain to file my taxes this year.
How can I make sure that I don't run into any issues next year,
and that, you know, there are no surprises in 2020 that I'm faced with?
Mykala, great question. I'm gonna hand this one over to you, Melissa.
What advice fo you have for Mykala?
It's, you know, crossing your Ts, dotting your Is.
Making sure you have all the correct forms.
If you have W-2s, you have 1099s,
if you have health insurance form, a 1095-A,
any investments. If you have interests, dividends,
anything like that. Knowing what you need
to file for that year and checking it all off
before you submit so you don't have to amend your return.
It seems like you're doing a lot of freelance work
if you're in video production.
One of the worst things that could happen
is to find out after the fact
that you could have gotten a deduction.
Track your expenses as you go, and I promise you,
you'll have a much better time with your taxes next year.
If, unfortunately, you find yourself continuing
to owe money, maybe just sock away a little bit each month
so that that impact in the following year
isn't quite as detrimental to your financial health.
I want to hear from each of you if you had to give one tip
or one takeaway, what would it be?
Alway stay organized, track as you go.
That's my most important tip.
Organize. Lynn?
Once a month download your entire bank statement into Excel.
And you can take those numbers and you can import those numbers
into almost any software that exists on the planet.
And then name each one of your expenses.
Melissa?
My biggest piece of advice
is to check to make sure at the end of the year
you have gotten all of your W-2s or 1099s.
I find a lot of the time that things are missing.
And another great checks and balances is putting all of your pay stubs
against that W-2 or 1099 and adding it up
and make sure all of the information corresponds.
You setting yourself up beautifully to have a seamless filing.
Thank you so much for joining us, ladies.
Your wisdom and knowledge is very valuable.
I know I learned a lot, and I'm sure you learned a lot, too.
Hopefully you're no longer fearful
or feeling anxiety over taxes
and you feel a sense of relief
and hopefully confidence to go out
and conquer your taxes moving forward.
I'm Brittney Castro wishing you all the best on your financial journey.