Things to Add When You’re Managing Your Tax Checklist
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 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. Here below are some tax checklist tips for you to consider.
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 also advised that you include correct information regarding individuals you have covered under your tax returns. These include your children, your partner, and or other dependants.
Do Not Forget to Include your Income Information
You have to document all of your sources of income if you wish to properly manage your taxes. Things such as investment income, businesses, and employement. Listed below are a list of income forms needed when filing your taxes.
W-2 forms you’re your you and your partner’s income from employment information.
Received income from alimony.
Social security benefits need Forms SSA-1099.
You will need Forms 8606 and 1099-R, these are for pension distributions and IRA.
Different 1099 forms for income from investments.
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Be sure to secure the correct IRS form that corresponds to your specific sources of income. 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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Your Tax Checklist Should Also Include Income Deductions
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.
Pay Attention to Tax Credits
Tax credits are directly deducted from your taxes. These will need documents in order for you to claim them, however. Listed below are some common tax credits.
Child tax credit for when you have children under 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 the taxes you owe are less than your refundable credit, you can receive the difference as reimbursement.
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