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? 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.
Clarify Your Personal Info
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. Individuals such as your partner, your children, and other dependants.
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. 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.
Received income from alimony.
Forms SSA-1099 for your social security benefits.
Pension distributions and IRA will require 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 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.
Be Mindful of Tax Credits
Tax credits are directly deducted from your taxes unlike tax deductibles that work to reduce the amount of income that is taxable. These will need documents in order for you to claim them, however. Here below are a list of common tax credits.
Child tax credit if you have children below 17 years of age.
Keeping an eye on your credits can greatly help in getting you a refund of your withholding tax. Credits can either be non-refundable or refundable. If the taxes you owe are less than your refundable credit, you can receive the difference as reimbursement.
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