Facing Tax Challenges Head-On: Common Issues and Smart Solutions

Paul Carrano
May 12
3 min read

Tax season can be overwhelming, especially for individuals, families, and small business owners juggling a range of financial responsibilities. The IRS reports that over 17 million individual tax returns are filed with errors each year. Whether it’s a missed deduction, misclassified income, or a forgotten deadline, even small missteps can lead to costly consequences.

Knowing the most common tax problems—and how to handle them—can go a long way in protecting your financial future. Certainty Tax Advisors provides expert support to help clients tackle these issues with confidence.

Misreporting Income and Expenses

Accurate reporting is the foundation of staying in good standing with the IRS. Yet one of the most frequent errors on both personal and business tax returns is misreporting income or overlooking important forms like 1099s or K-1s.

How to Avoid Misreporting

Track all sources of income, including freelance work, investments, and rental properties
Use accounting software that connects to your bank accounts
Double-check your entries against IRS transcripts when available

For business owners, combining personal and business expenses is a common pitfall. Be sure to report only valid, deductible business expenses—and keep documentation to back them up.

If a surprise tax form turns up after filing, don’t panic. Check out this article on how to handle unexpected 1099s.

Missing Tax Deadlines or Payments

Filing or paying late can lead to penalties and interest—even if it was an honest mistake. While filing extensions are available, they don’t extend your payment deadline.

Tips for Staying Compliant

Set calendar reminders for filing dates and quarterly tax deadlines
Schedule estimated payments in advance
Consult a tax advisor to plan ahead for larger obligations

If you do miss a deadline, act quickly. Filing as soon as possible and working out a payment plan with the IRS can help limit penalties and get things back on track.

Overlooking Available Deductions or Credits

It’s easy to leave money on the table if you don’t know what deductions or credits you’re eligible for. Many taxpayers and small businesses miss opportunities to reduce their tax bill.

Commonly Overlooked Deductions

Home office expenses
HSA contributions
Retirement plan contributions for the self-employed

Tax Credits to Consider

Child and dependent care credits
Education-related credits like the American Opportunity and Lifetime Learning Credits
Energy-efficient home improvement credits

Tax planning isn’t just for high earners. Strategic guidance ensures these opportunities are identified and used to your advantage—especially when your financial situation changes.

Self-Employment and Small Business Tax Complexity

Running a business or side hustle brings unique challenges. From estimating taxes to managing payroll and choosing the right business structure, there’s a lot to juggle.

Smart Moves for Small Business Owners

Choose a structure (LLC, S-corp, etc.) that aligns with your goals and tax profile
Keep business and personal finances separate
Stay on top of payroll tax filings and 1099 reporting

Outsourcing to a part-time CFO or accounting professional can ease the burden and improve long-term financial clarity.

IRS Notices and Audits

Getting a letter from the IRS can be stressful, but it doesn’t always mean you’re being audited. In many cases, it’s a request for clarification or missing information.

How to Respond to IRS Notices

Stay calm and read the notice thoroughly
Cross-check any figures or documentation mentioned
Respond by the deadline, keeping a copy of all correspondence
Call Certainty Tax Advisors if the issue seems complex or unclear

Most notices can be resolved quickly with the right approach. Professional assistance helps ensure nothing is missed or misunderstood.

Start Building Financial Peace of Mind

Tax issues don’t have to derail your progress. With the right support and planning, individuals and businesses can handle common challenges and stay one step ahead.

Here are a few things you can do today:

Gather your tax-related documents in one place
Review your latest IRS notices or filings
Schedule a check-in with a tax advisor if you’ve had any life or business changes recently

If you’re dealing with a tax concern—or simply want to avoid one—reach out to Certainty Tax Advisors. From planning to compliance to IRS responses, their team is ready to help you move forward with clarity and confidence.

Phone: 718-676-4185

Contact Form: https://www.ctaxadvisors.com/contact/