According to IRS tax filing data, 63.5 million people have filed their tax returns through 11 March. However, millions of Americans still have not filed their taxes yet. However, the deadline has almost arrived, i.e., April 18th; otherwise, the failure to file a penalty may disrupt their monthly budget. The following are a few tips that will ensure that you file your taxes on time:
Gather all your tax documents in one place:
For filing the taxes, gathering all the tax documents that include various forms like W-2s and 1099s is necessary. The W-2 form is for the earnings details of the taxpayer. The 1099-INT and 1099-DIV need to fill by the taxpayer for limited interest and dividend income, and the 1040 tax form for any transaction in virtual currency, i.e., cryptocurrency. The IRS advises the taxpayer to pay special attention to the stimulus payment and child tax credit. The IRS letter 6419, or your tax records and information from the IRS child credit portal, ensures the taxpayer files accurate taxes promptly.
Tax deductions and credits you can take:
The taxpayer can claim various tax deductions and credits, such as the Earned Income Tax Credit (EITC) or Child Tax Credit (CTC). If the taxpayer qualifies for the third stimulus payment but only receives a portion or none of it, he can claim a recovery rebate credit. It will increase the tax refund and reduce the tax liability. The taxpayer can claim tax deductions allowed by IRS like charitable donations, student loan interest deductions, and medical expense deductions to reduce the tax amount owed.
Don't forget tax refund:
According to the IRS report, there are approximately $1billion unclaimed tax refunds every year. The IRS advises taxpayers to file their taxes electronically, as it will automatically deposit the tax refund into their bank accounts within 21 days. It also provides tracking of the tax refund through the IRS website, i.e., IRS.gov/refunds, and mobile app within 24hours of the tax filer filing the e-return and four weeks after mailing the paper return.
Decide how to file the tax return:
There are several options for filing taxes, including the IRS online form and tax preparation software. The IRS online forms allow the taxpayer to calculate the tax on the taxable income by doing the math, which can be higher than the tax amount after claiming legitimate credits and deductions. Tax preparation software is available on various websites, which charges a fee to use it online. Where you can adjust your taxable income by claiming any deduction or credit for which you are not eligible as per your knowledge or recommended by a friend. Tax season is not a favorite for any business owner, and the deadline has also approached. It is becoming a soul-sucking experience for those who have not filed it yet. At this time, only a professional tax expert can help you manage your taxes more effectively and claim the deductions to which you are entitled.
For this purpose, Accountants Now is the place to start your tax filing process, your dedicated accountant and tax-experts will handle the filing and assure you are not to be penalized.