Tax Checklist Management – Things You Need To Add
Did you know that you can get a 5% unpaid tax per month due to failure of filing your taxes on time? 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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Not having the proper tax checklist can make filing taxes a stressful endeavour, but with careful preparation it can be done with ease. Here are some tips in making your tax checklist.
Double Check Your Personal Information to See If It’s Correct
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 are your children, your partner, and other dependants that are covered under your tax returns.
Do Not Forget to Include your Income Information
You must record all of your sources of income for proper tax management. 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 from alimony.
Social security Benefits will require Forms SSA-1099
Pension distributions and IRA will require Forms 8606 and 1099-R.
1099 forms for your investment income
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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.
Pay Attention to Tax Credits
Tax credits are immediately deducted from the tax that you owe. But, you require documents in order to claim them. Here’s a list of common tax credits
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 are either refundable or non-refundable. If your refundable credit exceeds the amount of your taxes, you get a refund of the difference.
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