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 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 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 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 include your children, your partner, and or other dependants.
Remember to Include 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 for the employment income information of you and your spouse.
Income from alimony.
Social security Benefits will require Forms SSA-1099
You will need Forms 8606 and 1099-R, these are for pension distributions and IRA.
Different 1099 forms for income 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 can reduce the amount of money you owe.
Pay Attention to 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 or saver’s credit.
Child tax credit if you have children below 17 years of age.
Education credits like tuition fees.
Paying attention to your credits will help you secure a tax withholding reimbursement. Credits come as 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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