Tax Checklist Management – Things You Need To Add
Are you aware that failure in filing your taxes on time has a penalty of 5% unpaid tax monthly? 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. Consider these 5 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. These are your children, your partner, and other dependants that are covered under your tax returns.
Never Forget Your Income Info
You need to write down all of your sources of income in order for you to manage your taxes. These can include income from investments, employment, and businesses. Below is a list of forms you will need when filing 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.
Forms 8606 and 1099-R.
1099 forms for your investment income
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Be sure to have the right IRS form of your 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 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 easily 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. These will need documents in order for you to claim them, however. Listed below are some common tax credits.
Retirement savings contributions.
Child tax credit for when you have children under 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 come as 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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