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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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.
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 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 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 are forms that you will need when you file your 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.
1099 forms for any income received from investments.
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Be sure to secure the correct IRS form that corresponds to your specific sources of income. Other sources of income such as jury duty, winnings from gambling, scholarships, and medical savings account, also need to be reported. You can make use of online pay stub generators to create pay stubs for documentation.
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Your Tax Checklist Should Also Include Income Deductions
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.
Keep an Eye for Tax Credits
Tax credits are directly deducted from your taxes. 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 for when 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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