Debunking Tax Myths in Indianapolis: What You Really Need to Know
As tax season approaches, the streets of Indianapolis buzz with a familiar energy. Yet, beneath this hustle lies a labyrinth of myths that could cost residents dearly. At On-Target CPA, we’ve witnessed firsthand the impact of these myths on financial well-being. Let’s unravel these misconceptions to prevent unnecessary expenses.
Common Myth 1: Filing for an Extension Means More Time to Pay
One prevailing myth suggests that a tax filing extension grants additional time to pay taxes. However, while the extension allows more time to file your return, it doesn’t extend the payment deadline. Interest and penalties remain tied to the original deadline, creating potential financial strain. According to the IRS, penalties can amount to 0.5% of the unpaid taxes per month, which adds up quickly. If you’re caught off guard, pay what you can by April 15 and consult a CPA to explore payment plans.
Myth 2: Itemizing Deductions is Always More Beneficial
Itemizing deductions might seem advantageous, but it’s not universally beneficial. The Tax Policy Center notes that with the standard deduction increase in 2018, fewer than 14% of taxpayers itemize. At On-Target CPA, we equip clients with the knowledge to evaluate their expenses against the standard deduction. This personalized approach often reveals that the simplicity of the standard deduction can be more financially rewarding.
Myth 3: All Tax Software Yields the Same Results
Many individuals rely on tax software for convenience, but these programs aren’t one-size-fits-all. According to a Consumer Reports survey, over 20% of users encountered issues with incorrect calculations. Indiana’s unique tax codes require a nuanced understanding that software may miss. Engaging with a CPA ensures compliance and optimization of deductions and credits, leading to long-term savings.
Myth 4: CPAs Aren’t Necessary for Simple Tax Situations
Even straightforward tax scenarios can benefit from professional insight. CPAs provide more than just filing services; they offer strategic advice that can lead to significant savings. A study by AICPA found that CPA involvement increases average refund amounts by $400. In Indianapolis, where state taxes add complexity, having a local partner like On-Target CPA can be invaluable.
Real Stories: Indianapolis Taxpayers Who Avoided Pitfalls
Consider the case of Sarah, a local entrepreneur who initially relied on software for her taxes. After consulting with On-Target CPA, she discovered overlooked deductions amounting to over $3,000 in savings. Or John, who believed an extension meant no penalties, only to face $500 in fees. Early CPA intervention mitigated further costs.
Get Ahead This Tax Season
- Schedule your consultation: Call us today at (317) 820-2000 for personalized advice.
- Limited-time offer: Book by March 30 for a free initial assessment.
- Visit our office: 101 West Ohio Street, Suite 800, Indianapolis, IN, 46204.
Tax myths don’t have to derail your finances. At On-Target CPA, we’re dedicated to providing clarity and actionable insights. Don’t wait—contact us now and secure your financial future.
