Are you aware that you can receive a penalty of 5% unpaid tax per month whenever you file your taxes past the deadline? Filing your taxes 60 days late means you will also have to pay at least $135 or the full amount of taxes you are indebted to the government, whichever is the lowest.
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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 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.
Double Check Your Personal Information to See If It’s Correct
The IRS will require you to fill in the proper personal information, your social insurance, and your date of birth. It is also advised that you include correct information regarding individuals you have covered under your tax returns. Individuals such as your partner, your children, and other dependants.
Remember to Include Your Income Info
You need to write down all of your sources of income in order for you to manage your taxes. Things such as investment income, businesses, and employement. Below is a list of forms you will need when filing taxes.
W-2 forms for the employment income information of you and your spouse.Received income from alimony.Social security benefits need Forms SSA-1099.Pension distributions and IRA will require Forms 8606 and 1099-R.1099 forms for any income received from investments. Click to learn more now!
Be sure to secure the correct IRS form that corresponds to your specific sources of income. 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. You can read more here.
Don’t Forget to Include Income Deductions in Your Checklist
Your taxable income amount can significantly be reduced by income deductions. This can reduce the amount of money you owe. Be Mindful of Tax Credits
Tax credits are directly deducted from your taxes. Though, you will need documents in order to claim these. Here’s a list of common tax credits.
Child tax credit if you have children under 17 years of age. Education credits for example tuition fees and the likes
You will be able to get a significant reimbursement of your tax withholding if you pay close attention to your credits. Credits can either be non-refundable or refundable. Having refundable credit that is more than your taxes will allow you to receive the difference as refund.
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