Things You Must Add During Tax Checklist Management
Did you know that you can get a 5% unpaid tax per month due to failure of filing your taxes on time? Filing your taxes 60 days late means you will also have to pay at least $135 or the full amount of taxes you are indebted to the government, whichever is the lowest.
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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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Filing your taxes is quite the daunting task without the right checklist, but with proper preparation you can go through with it in a breeze. 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 a must that you include detailed and accurate information regarding individuals that are covered under your tax returns. Individuals such as your partner, your children, and other dependants.
Remember to Include Your Income Info
You must record all of your sources of income for proper tax management. These can include income from investments, employment, and businesses. 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 from alimony.
Social security Benefits will require 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. 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 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.
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. But, you require documents in order to claim them. Here below are a list of common tax credits.
Child tax credit if 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 come as either refundable or non-refundable. Having refundable credit that is more than your taxes will allow you to receive the difference as refund.
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