Things to Add When You’re Managing Your Tax Checklist
Did you know that you can get a 5% unpaid tax per month due to failure of filing your taxes on time? 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 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. Consider these 5 tips in making your tax checklist.
Make Sure Your Personal Info is 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. 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 are forms that you will need when you file 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.
Pension distributions and IRA will require Forms 8606 and 1099-R.
Different 1099 forms for income from investments.
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Make sure to have the proper IRS form for specific income sources. Other sources of income such as jury duty, winnings from gambling, scholarships, and medical savings account, also need to be reported. You can make pay stubs through pay stub generators so you can document your income better.
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Don’t Omit Income Deductions from Your Checklist
Your taxable income amount can easily be reduced by income deductions. 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 immediately deducted from the tax that you owe. Though, you will need documents in order to claim these. Listed below are some common tax credits.
Retirement savings contributions.
Child tax credit if you have children below 17 years of age.
Education credits like tuition fees.
Keeping an eye on your credits can greatly help in getting you a refund of your withholding tax. Credits are 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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