Things You Must Add During Tax Checklist Management
Are you aware that you can receive a penalty of 5% unpaid tax per month whenever you file your taxes past the deadline? If you file your taxes 60 days past due then you are also obligated to pay $135 minimum or how much money you owe the government in total, whichever is lower.
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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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Not having the proper tax checklist can make filing taxes a stressful endeavour, but with careful preparation it can be done with ease. Here below are some tax checklist tips for you to consider.
Make Sure Your Personal Info is Correct
The IRS will require you to fill in the proper personal information, your social insurance, and your date of birth. 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.
Remember to Include Your Income Info
You need to write down all of your sources of income in order for you to manage your taxes. These include any businesses, income from investments, and employment. Listed below are a list of income forms needed when filing your taxes.
W-2 forms for the employment income information of you and your spouse.
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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Make sure to have the proper IRS form for specific income sources. You should also report other sources of income such as jury duty, medical savings account, scholarships, and gambling winnings. For income documentation, you can make pay stubs through the use of online pay stub generators.
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Don’t Omit Income Deductions from Your Checklist
Income deductions can significantly reduce taxable income. This can reduce the amount of money you owe.
Be Mindful of Tax Credits
Tax credits are directly deducted from your taxes unlike tax deductibles that work to reduce the amount of income that is taxable. Though, you will need documents in order to claim these. Here’s a list of common tax credits
Retirement savings contributions.
Child tax credit for when you have children under 17 years of age.
Education credits like tuition fees.
Paying attention to your credits will help you secure a tax withholding reimbursement. Credits come as 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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