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? You also have to pay a mandatory $135 or the sum of taxes you’re indebted to pay the government(whichever is the lower amount) if you file 60 days past due.
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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 are some tips in making your tax checklist.
Double Check Your Personal Information to See If It’s Correct
The IRS needs you to fill in your correct personal information, birth date, and social insurance. It is also advised that you include correct information regarding individuals you have 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 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.
Income you have received from alimony.
Social security benefits need Forms SSA-1099.
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 also need to report your other sources of income such as scholarships, medical savings account, jury duty, and winnings from glambling. You can make pay stubs through pay stub generators so you can document your income better.
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Don’t Forget to Include Income Deductions in Your Checklist
Income deductions can significantly reduce taxable income. Your refund can significantly be increased as well as reduce the amount of money you owe.
Keep an Eye for 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. Here’s a list of common tax credits
Retirement savings contributions.
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 can either be non-refundable or refundable. Having refundable credit that is more than your taxes will allow you to receive the difference as refund.
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Attributed by: 3 Tips from Someone With Experience