Please ensure Javascript is enabled for purposes of website accessibility

The No. 1 Reason You Pay Too Much in Taxes

By Dan Caplinger and Mike Klesta – Updated Feb 15, 2017 at 11:39AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

There's a very basic mistake that most people with their taxes. Find out what it is and how to avoid it.

No one likes to pay a huge amount in income taxes. But as it turns out, many taxpayers pay more taxes than they have to for a very simple reason: they're too scared to take the deductions and credits they're entitled to take.

In the following segment from their video introducing investors to several essential investment planning topics, Motley Fool director of investment planning Dan Caplinger talks with Fool markets/IP bureau chief Mike Klesta about this key mistake taxpayers make with their tax planning. Dan notes that people are scared of getting audited by the IRS, and so they'll choose not to take deductions and credits even though they're clearly eligible to receive them. Given the relatively low rates of audits, however, Dan concludes that it's almost always smarter to go ahead and claim all the tax benefits that apply to your situation rather than leaving money on the table that you could have put in your own pocket.

We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Related Articles

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.