The remedy: Accept that tax filing is going to take some homework. Before you start your return, check out the countless publications -- including Bankrate's Tax Guide, of course, including our look at "10 new tax laws you need to know" -- so you'll know exactly where this year's taxes might trip you up. Again, you also can turn to software or a tax pro for help in claiming all your possible tax breaks.
3. Afraid I'll make a mistake that will cost me moneyThis is a close relative of fear No. 2. But here, the fear is not of omission, but commission.
This includes things as simple as filing the wrong tax form. It happens. In trying to get through filing as quickly as possible, some folks opt for the easy, in this case, the 1040EZ, way out and end up cheating themselves.
Or they choose the incorrect filing status, such as single when they're eligible to file as the more tax-advantageous head of household. Those are just a couple of the many mistakes that filers make every year.
The remedy: Slow down. You still have plenty of time to do it right. Read the instructions. If you're using software, don't skip steps just to finish. Answer all your tax pro's questions. If he or she says to provide more information, then provide it. A little extra work and attention to detail could cut your tax bill or get you a bigger refund.
4. Afraid that my tax adviser is incompetent or a crookYou know you need help, but you're afraid that the person you turn to could be more of a hindrance. Unfortunately, sometimes this fear is well-founded.
Last year, the Government Accountability Office issued a report with the disturbing finding that in a limited study of commercial tax prep chains in major metropolitan areas, all the returns completed in those offices were wrong to some degree.
Over the last few years, the IRS has shut down hundreds of branches of franchise tax preparation offices across the United States after the operators allegedly filed bogus returns for clients, cheating the federal government out of millions of dollars.
Even big name, high-dollar help sometimes produces unexpected tax costs. Global accounting and consulting giant KPMG acknowledged in 2005 that some of its tax shelters didn't meet IRS standards and agreed to pay the government millions to settle the inquiry. The once-prestigious law firm Jenkens & Gilchrist closed its offices across the U.S. in the wake of a nonprosecution agreement it reached with the IRS about tax shelters it offered clients.
Even celebrities aren't immune to questionable tax counsel. Actor Wesley Snipes was convicted in 2008 on three misdemeanor counts of failing to file returns on $13.5 million in earnings. He's appealing his three-year federal prison sentence. However, Snipes was acquitted of more serious fraud and conspiracy charges in large part because of his defense claim that he had acted on the bad advice of his tax professionals.
And although Snipes and the other taxpayers who participated in questionable shelters may have indeed been tax adviser victims, they still ended up owing additional taxes and penalties.
The remedy: Everybody makes mistakes, even tax professionals. The key is to make sure you don't end up paying for your tax preparer's mistakes.
Start with the hiring process. Investigate several potential preparers and thoroughly check out each before you hand over your personal tax documents.
Once you're a client, don't take every recommendation at face value. Ask questions and make sure you understand the answers. Most of all, remember the adage "if it sounds too good to be true, it probably is."