Alright… we know that taxes aren’t most people’s definition of “fun”, they can be a major source of anxiety. As we come to the end of the year, you might be feeling similar. It’s time to let go of that fear with some core understanding.
Here are 5 common tax fears and why they might not be as scary as you think…
- “I’m afraid I will get audited.”
This is a big one. No one likes the idea of being watched especially when it comes to finances. The truth is, only about 1% of tax filings are audited. Your chances of actually being audited are slim. If that’s not enough to put your mind at ease, remember that you will have PLENTY of warning if you are being audited. If you protect yourself with the right tax professional, you should be just fine! - “I’m not going to prepare my tax return correctly.”
Taxes are confusing and the IRS recognizes that the average person filing is not a professional. In fact, the IRS is not going to penalize you for an honest mistake. The IRS will let you know if a mistake has been made and what kind of mistake that is. When in doubt, have a tax professional reach out to the IRS on your behalf… The effort to mend the mistake might even result in penalties being waived. - “I am scared of taking deductions.”
The tax code is FULL of deductions that you may be entitled to take. Many people feel in the dark about these deductions and don’t take advantage of them for fear of being audited. This is silly! You are entitled to legitimate deductions that will save you money… Take them! Document your deductions and take the ones you are entitled to. The IRS will not penalize you for that. - “I’m going to owe a huge tax bill that I can’t pay.”
This is a huge one for my clients. In the event that you DO have a bill that exceeds your bank account, the IRS is usually willing to allow you to pay overtime via installment payments. The important thing is to NEVER skip filing your taxes because you are afraid you cannot pay. Avoidance is the quickest way to be hit with thousands in penalties & interest. Trust me, it ain’t worth it.
An even better way to avoid this happening is to work with a tax professional. Tax planning and understanding where you can save will help you adequately plan for when that bill comes. A tax strategy plan is a plan of action month-to-month that will help you understand what you need to do to keep your tax bill as small as possible.
Don’t have a tax plan? You can get this done in one day! Fast, accurate, clear results…that’s what you get when you work with me. I’d love to get your 2022 tax plan going so you never have to worry about a surprise tax bill all year long. Click here for everything you need to know about getting your custom tax strategy plan. - “The IRS is going to come after me.”
If you’ve read this far, you probably know how to combat this fear… But in case you don’t, here’s what you need to know. Mail from the IRS should be opened right away… even if you’re scared of what’s inside. Letters from the IRS will tell you everything you need to know including deadlines for additional payments and instructions for what actions to take. Fear not! If you still need some support, you can always consult a professional. The IRS is not out to get you, they will give you plenty of heads up before taking action.
Taxes might be complex, but they should not have you shaking in your boots. As a business owner, it’s time to invest in getting a tax professional to join your squad. Make that your priority now to set yourself for a smooth year void of any surprise tax bills.
If this post wasn’t enough to soothe your fears, let’s chat about it! Reply to this email or send me a DM on Instagram @Chikaobihcpa. Let me know what you’re afraid of and I can give you support!
