Tax Checklist Management – Things You Need To Add
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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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 below are some tax checklist tips for you to consider.
Clarify Your Personal Info
The IRS will need you to provide your personal information, date of birth, and social insurance. 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 must record all of your sources of income for proper tax management. These can include income from investments, employment, and businesses. 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.
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.
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. 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
Your taxable income amount can significantly be reduced by income deductions. This can reduce the amount of money you owe.
Keep an Eye for Tax Credits
Tax credits are immediately deducted from the tax that you owe. Though, you will need documents in order to claim these. Here below are a list of common tax credits.
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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