Did you know that you can get a 5% unpaid tax per month due to failure of filing your taxes on time? You also have to pay a mandatory $135 or the sum of taxes you’re indebted to pay the government(whichever is the lower amount) if you file 60 days past due.
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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.
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. Individuals such as your partner, your children, and other dependants.
Never Forget 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 are forms that you will need when you file your taxes.
W-2 forms for the employment income information of your spouse and yourself.
Income from alimony.
Social security Benefits will require Forms SSA-1099
Forms 8606 and 1099-R.
1099 forms for any income received from investments.
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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. 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
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.
Pay Attention to 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’s a list of common tax credits
Retirement savings contributions or saver’s credit.
Child tax credit if you have children below 17 years of age.
Education credits for example tuition fees and the likes
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. If the taxes you owe are less than your refundable credit, you can receive the difference as reimbursement.
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