Money Monday: Tax Season Pitfalls And Common Mistakes Made

On Money Monday our money expert Paul Hood joined News On 6 at 4 p.m. to discuss some of the common tax mistakes people make.

Monday, January 13th 2025, 5:49 pm

By: News On 6


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On Money Monday our money expert Paul Hood joined News On 6 at 4 p.m. to discuss some of the common tax mistakes people make.

What are some of the most common tax mistakes people make?

"Some of the more common ones is missing out on deductions or credits," said Paul Hood, a tax expert. "For instance, there's a child tax credit, I think its two grand or whatever for every child. But once your child hits 17, that goes away unless they're still in school, and then you can get $500."

What other mistakes do people frequently make?

"Another big common mistake is, is filing an extension, which is a very positive thing, is my opinion, it helps mitigate the risk of audits, but it extension extends the time to file not to pay," Hood explained. "So if you think you're going to, oh, you need to send some money in with that, that extension and just, just common things like that, that people tend to miss out on."

What happens if you don't pay taxes on time after filing an extension?

"If you don't have the money, go ahead and still file the extension, because there's penalties for failure to file and failure to pay," Hood said. "So if you file the extension, a properly filed extension, you're out of the failure to file penalty. But if you don't pay the money, then they're going to hit you with the failure to pay, so it's still a good deal."

Why is it important to be thorough when filing taxes yourself?

"Research shows there's a lot of money for people, especially prepare their own return," Hood noted. Jonathan Cooper, who does his own taxes, added: "I feel like I'm spending too much, you know, I'm giving the government too much money. But there are some very common mistakes that people can make."

What's the risk of making a major mistake on your tax return?

"There was a story few years ago a lady filed a return on her own and was getting a $1 million refund. Iris sent it to her. She was not entitled to the big they came back after it pretty quick. You don't get to keep that million dollars, I guess if you had, you know, leave the country," Hood said.

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