Things You Must Add During Tax Checklist Management
Did you know that you can get a 5% unpaid tax per month due to failure of filing your taxes on time? Filing your taxes 60 days late means you will also have to pay at least $135 or the full amount of taxes you are indebted to the government, whichever is the lowest.
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IRS reports say that about 5% of Americans were unable to file their taxes in the year 2018 and accumulated a debt to the IRS of about $130 billion dollars in interests, back taxes, and penalties.
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Filing your taxes is quite the daunting task without the right checklist, but with proper preparation you can go through with it in a breeze. Here below are some tax checklist tips for you to consider.
Clarify Your Personal Info
The IRS will need you to provide your personal information, date of birth, and social insurance. It is also advised that you include correct information regarding individuals you have covered under your tax returns. These are your children, your partner, and other dependants that are covered under your tax returns.
Do Not Forget to Include your Income Information
You must record all of your sources of income for proper tax management. Things such as investment income, businesses, and employement. Below are forms that you will need when you file your taxes.
W-2 forms for the employment income information of you and your spouse.
Income you have received from alimony.
Social security benefits need Forms SSA-1099.
Pension distributions and IRA will require Forms 8606 and 1099-R.
1099 forms for any income received from investments.
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Be sure to have the right IRS form of your income sources. You should also report other sources of income such as jury duty, medical savings account, scholarships, and gambling winnings. You can make use of online pay stub generators to create pay stubs for documentation.
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Don’t Forget to Include Income Deductions in Your Checklist
Your taxable income amount can significantly be reduced by income deductions. Your refund can significantly be increased as well as reduce the amount of money you owe.
Be Mindful of Tax Credits
Tax credits are immediately deducted from the tax that you owe. These will need documents in order for you to claim them, however. Listed below are some common tax credits.
Retirement savings contributions.
Child tax credit for when you have children under 17 years of age.
Education credits for example tuition fees and the likes
Paying attention to your credits will help you secure a tax withholding reimbursement. Credits are either refundable or non-refundable. If the taxes you owe are less than your refundable credit, you can receive the difference as reimbursement.
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