Tax Checklist Management – Things You Need To Add
Are you aware that failure in filing your taxes on time has a penalty of 5% unpaid tax monthly? 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 state that more than 5% of Americans have failed to file taxes in the year 2018 alone and have amassed about $130 Billion Dollars in back taxes, interests and penalties.
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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. Consider these 5 tips in making your tax checklist.
Clarify Your Personal Info
The IRS will require you to fill in the proper personal information, your social insurance, and your date of birth. It is a must that you include detailed and accurate information regarding individuals that are covered under your tax returns. These include your children, your partner, and or other dependants.
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. Below is a list of forms you will need when filing taxes.
W-2 forms for the employment income information of you and your spouse.
Received income from alimony.
Forms SSA-1099 for your social security benefits.
You will need Forms 8606 and 1099-R, these are for pension distributions and IRA.
1099 forms for your investment income
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Be sure to have the right IRS form of your income sources. You also need to report your other sources of income such as scholarships, medical savings account, jury duty, and winnings from glambling. You can make use of online pay stub generators to create pay stubs for documentation.
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Don’t Omit Income Deductions from Your Checklist
Income deductions can greatly help in reducing your amount of taxable income. 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. But, you require documents in order to claim them. Listed below are some common tax credits.
Retirement savings contributions or saver’s credit.
Child tax credit if you have children under 17 years of age.
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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