A lot of people who file their taxes on their own make some common mistakes. Here are 3 big ones, according to attorney Kelly Erb, who specializes in tax law:
The first mistake, is the most common, not getting receipts or keeping them! Any business expense from buying ink cartridges for your home office, to taking a client to lunch, to cab fares when you’re traveling on business, must be documented if you plan to deduct them. So always get a receipt, and at the end of every day, make a quick note on it so you know what it was for. Then get an accordion file with 12 slots, one for every month, and put your receipts away. Also, get receipts for any donations you make to charities. Make sure it includes the charity name, the date, and a list of what was donated. If you don’t want to hang onto a bunch of scraps of paper, get a tool like Neat Receipts. It’s a portable scanner, you can scan your receipts and keep digital copies.
The second most common tax mistake: Forgetting to write down mileage! Business trips, job related moving expenses, plus trips to a doctor are deductible. But you have to keep a record of the date, the miles traveled and what the appointment was for.
The final mistake people make when filing their own taxes: Mixing your business life with your personal life. Business expenses must be kept separate, and an easy way to make sure is to use a designated credit card only for business purchases. A common mistake would be running to the grocery store and getting stuff for dinner, as well as coffee for the office coffee maker. You have to keep those things separate.