Things You Must Add During Tax Checklist Management
Are you aware that failure in filing your taxes on time has a penalty of 5% unpaid tax monthly? 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 have stated that about 5% of Americans were unsuccessful in filing their taxes in 2018, they have accumulated up to $130 billion dollars in debt to the IRS in penalties, back taxes, and interests.
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Filing taxes can be tough if you don’t have a proper tax checklist, but it does not have to be so if you prepare right beforehand. Here below are some tax checklist tips for you to consider.
Make Sure Your Personal Info is Correct
The IRS will need you to provide your personal information, date of birth, and social insurance. It is a must that you include detailed and accurate information regarding individuals that are covered under your tax returns. Individuals such as your partner, your children, and other dependants.
Never Forget Your Income Info
You have to document all of your sources of income if you wish to properly manage your taxes. These can include income from investments, employment, and businesses. Below is a list of forms you will need when filing taxes.
W-2 forms you’re your you and your partner’s income from employment information.
Income you have received from alimony.
Social security Benefits will require Forms SSA-1099
Pension distributions and IRA will require Forms 8606 and 1099-R.
Different 1099 forms for income from investments.
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Be sure to have the right IRS form of your income sources. Other sources of income such as jury duty, winnings from gambling, scholarships, and medical savings account, also need to be reported. You can make pay stubs through pay stub generators so you can document your income better.
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Don’t Omit Income Deductions from Your Checklist
Your taxable income amount can easily be reduced by income deductions. This can reduce the amount of money you owe.
Pay Attention to Tax Credits
Tax credits are directly deducted from your taxes unlike tax deductibles that work to reduce the amount of income that is taxable. These will need documents in order for you to claim them, however. Here below are a list of common tax credits.
Retirement savings contributions or saver’s credit.
Child tax credit if you have children below 17 years of age.
You will be able to get a significant reimbursement of your tax withholding if you pay close attention to your credits. Credits are either refundable or non-refundable. If your refundable credit exceeds the amount of your taxes, you get a refund of the difference.
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