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Tax Checklist Management – Things You Need To Add
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 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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Not having the proper tax checklist can make filing taxes a stressful endeavour, but with careful preparation it can be done with ease. Consider these 5 tips in making your tax checklist.

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. You are also required to log detailed information regarding any 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 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. 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
Forms 8606 and 1099-R.
1099 forms for any income received from investments.

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Make sure to have the proper IRS form for specific income sources. You should also report other sources of income such as jury duty, medical savings account, scholarships, and gambling winnings. For income documentation, you can make pay stubs through the use of online pay stub generators.

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Your Tax Checklist Should Also Include Income Deductions

Income deductions can greatly help in reducing your amount of taxable income. 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. Though, you will need documents in order to claim these. Here below are 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 like tuition fees.

Paying attention to your credits will help you secure a tax withholding reimbursement. 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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