If you have plans of filing your tax returns this 2020, then you are in good hands. About 33% of Americans are filing their taxes every year.
As you gather your tax documents for 2017 and you are in the process of filing your taxes, you need to keep some essential things in mind. Below are some of these tips that will help you prevent any mistake or pitfall and be sure that you save more money in your pockets. After all, the lesser money that you have to give to Uncle Sam, the more you can allot to reaching your financial goals, paying whatever debt you have, or simply giving building your credit score.
Be Aware of Filing Deadline
April 15 is marked in our heads as this is the deadline for filing taxes. However, if this date happens to fall on a holiday or weekend, then the due date will be different by a few days. In case the date is different, it would still be after April 15.
Be Sure that You Really Need to File
If you are in doubt if you have to file, you may find out about it through IRS’s online Interactive Tax Assistant. You have to answer some questions about your gross income, filing status, and if you have a federal tax withheld, to determine if you have to file for the year.
Review your Previous Tax Returns
By taking a look at your previous stats and federal tax returns, you will be making your tax filing for the year easier. This is because most information will be the same, like your children’s social security number, federal ID number, etc.
Should You Itemized Deductions?
Itemizing the deductions is only advantageous of those deductions would surpass standard deductions. If you are utilizing a tax software program, it should guide you on what you need to know. If you choose to itemize the deductions, you need to have some forms like 1098, receipts for expenses incurred, medical expenses, and unreimbursed business expenses.
Don’t Miss State Taxes
The majority of states need a separate tax return that should be filed. Seven states do not collect state income tax, and these are Wyoming, Washington, Texas, South Dakota, Nevada, Florida, and Alaska.
Check or even Double-Check your Return
Before dropping your income tax return in the mail or hitting the submit button when filing online, be sure that you have carefully checked all figures you have entered. One mistake could mean a filing error that can lead to an overinflated refund that you have to pay back soon.
File on Time
If you happen to owe some amount that you can’t pay in full by the time of Tax Day, it is a must to file on time, and you need to pay the best amount you can. Doing this would help you avoid any late filing penalties, as well as to minimize the interest charges on unpaid balances. If you can’t afford to pay in full, you may request an installment agreement from the IRS.
Get the Most of Free Filing
The IRS offers Free File so you can file without paying anything. The amount of the adjusted gross income will determine the right version you have to use. If it happens to be $66,000 or below, you may take advantage of the free filing software. In case the adjusted gross income is a lot higher, you can use the Free File forms.
You may still file your paper returns, and in fact, many filers do this as they are not comfortable sending their tax and personal information online. But, e-filing through the website of the IRS is safe and would expedite the refund if you are getting one.
The tax season is dreaded by many, but as long as you have the tips above, you can be sure that you are properly guided. With proper guidance and knowing the right information, there is a need to fear anything about matters concerning your tax. So, be sure that you read and understand the things above and apply them in yourself so you can make things so much easier for you.