Tax season in the U.S. can be a stressful time for many people as they navigate through complexities that often cause confusion.
But it's not just the grasp of unfamiliar details that can feel like a burden. The fear of unexpected financial expenses can itself cause people to procrastinate when it comes to completing and filing tax forms.
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The April 15 tax deadline every year creates a lot of pressure as well. While some people file early in anticipation of refunds, others wait to file their taxes because they are afraid their refunds won't be as bountiful as they hope.
Another factor contributing to stress at tax time is the fear people have that they might make mistakes. Filing incorrect tax information can sometimes result in penalties.
Other worries people have include whether they might miss deductions, make calculation errors or forget about income that should be reported.
In an exclusive interview, Dan Geltrude, managing partner at Geltrude & Company, talked with TheStreet about common mistakes people make filing taxes, including one that can relieve a lot of stress all on its own.
The tax filing mistake people can avoid with one decision
From the floor of the New York Stock Exchange, TheStreet host J.D. Durkin asked Geltrude about common mistakes people make during tax season.
"You know, I'll tell you this," Geltrude said. "People are better served when they actually retain a professional to do their tax return."
Geltrude said the money spent on a professional to do your taxes can be paid for by the decision to hire them alone, because the person filing has more familiarity with tax codes.
"The truth of the matter is that when you are paying a professional to make sure that you are getting every single tax deduction available to you, it should be a good investment," Geltrude said. "And you make that back."
Because tax professionals are well-versed in the related laws and regulations, they are able to identify deductions and credits many people may not know about.
A tax professional also helps to ensure accurate filing and can provide assistance in case of an audit.
These facts can make using a tax professional the best decision people can make (and the biggest mistake they can make if they don't) and it gives tax filers peace of mind.
Other tax mistakes people make
Geltrude commented further on some other things to remember when filing taxes.
"Keep in mind to make that IRA contribution before April 15," he said "If you're under 50, you get $6,500 you can put away tax deferred. Same thing if you're 50 and over, it's $7,500. You should absolutely take advantage of that."
Durkin asked Geltrude about earnings on which some people don't realize they need to pay taxes.
"Well, I'll tell you," Geltrude said. "Right now that unemployment compensation, that's kind of a killer. If they're unemployed for a period of time, they take that money, they spend it, and they forget all about the fact that tax is going to be due. So they get caught on that. So that's one of those really common things that pop up."
The tax expert also mentioned the fact that many people forget about work they had done and income they had received from it the previous year.
"People also forget about 1099s," he said. "They don't capture all of them. They forgot while they're doing some gig work that had a 1099. They didn't put it on their tax return."
Another form of income is also more commonly forgotten about at tax time these days.
"Also, profits on cryptocurrency sales," Geltrude said. "Don't forget about those. Those are going to be taxable. And they're likely taxable as ordinary income if it's short term, meaning within one year."
"So those are a few things that you have to keep in mind."
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