Things to Add When You’re Managing Your Tax Checklist
Are you aware that you can receive a penalty of 5% unpaid tax per month whenever you file your taxes past the deadline? 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 say that about 5% of Americans were unable to file their taxes in the year 2018 and accumulated a debt to the IRS of about $130 billion dollars in interests, back taxes, 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 below are some tax checklist tips for you to consider.
Make Sure Your Personal Info is Correct
The IRS will require you to fill in the proper personal information, your social insurance, and your date of birth. 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.
Never Forget Your Income Info
You must record all of your sources of income for proper tax management. Things such as investment income, businesses, and employement. 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.
Social security benefits need Forms SSA-1099.
You will need Forms 8606 and 1099-R, these are for pension distributions and IRA.
1099 forms for any income received from investments.
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Be sure to have the right IRS form of your income sources. You also need to report your other sources of income such as scholarships, medical savings account, jury duty, and winnings from glambling. For income documentation, you can make pay stubs through the use of online pay stub generators.
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Don’t Forget to Include Income Deductions in Your Checklist
Income deductions can greatly help in reducing your amount of taxable income. This will help increase your refund and lower the amount of money you owe.
Be Mindful of Tax Credits
Tax credits are directly deducted from your taxes. But, you require documents in order to claim them. Here below are a list of common tax credits.
Retirement savings contributions or saver’s credit.
Child tax credit for when you have children under 17 years of age.
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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