Don't wait until this year's deadline for tax filing and tax refund has ended. Avoid putting it off because youÂ're intimidated by doing all that paperwork. ItÂ's important that you file your taxes as soon as possible so you avoid the penalties that can suck your money dry. ItÂ's as important also for you to file tax returns and exemptions to get your money back. We need to be smart and know that filing taxes protects us and our money, so here are several tips to help you get started on getting those tax forms done!
1. Check if you have all the correct documents that you need to fill out. The tax forms should be from your company that you work for, or from your mortgage, and others. These papers include:
For income and taxes withheld, get the W-2 form and a 1040 form from your employer. You will have to fill up a 1099-MISC if youÂ're doing a freelance job for supplementary income. The 1099-MISC works like a W-2 that clients send in to report their total payments for the previous year.
The 1099-DIV form for your brokerage or mutual funds. This reflects the dividends paid and distributions made in the course of the year. You can also get a 1098 because of your mortgage to show the interest you pay annually. And a1099-INT form for your bank accountÂ's interest income.
Do check if you still have more forms to receive. Check the IRS website for a guide or call them at 800-829-1040
2. Save money with IRS.gov, as you can be qualified to file your forms electronically if youÂ've earned around $55,000 or less. The web forms are neat and concise so you donÂ't have to be afraid that youÂ'll get more confused that way. The statistics show that about 70% of tax payers that qualify in 39 states that do allow e-filing donÂ't take advantage of the free online tax filing.
3. Like so many people, donÂ't forget to read about what you can actually save and claim from the IRS. Get more money from your returns by claiming your telephone excise tax refund. In February 2007, there are about 35% of those qualified for a telephone excise refund of $30-$50 that went unclaimed. There are hundreds of informative articles and news stories that feature tax breaks, what are special exclusions, exemptions and deductions, and read about if you can avail of those.
4. Hiring an accountant can be really pricey, so as much as possible do it so by yourself and just review all the information and calculations over and over again. If youÂ're just confused in general, get help in any way you can. The IRS is also open for your queries, so you can check out their website for their FAQÂ's and general information or call them at the number above. If youÂ're software-savvy you can also use those tax preparation programs to get faster results and have a lower margin for calculation errors.
5. Avoid all kinds of penalties! ThatÂ's why itÂ's a must for you to file your taxes and meet the deadline because of the penalties. The 5% monthly penalty for not passing your tax forms will absolutely drain your money. Imagine having to pay an additional 5% of the total tax that you owe! All that money thatÂ's supposed to be yours would be in the hands of the government because you were careless with the deadline! Did you know that the maximum penalty can be 25% of the taxes you owe? Ouch.
With these tips above, do your best to meet the deadline of April 15th of every year. Tax payers will always have plenty of options to avoid penalties if they manage to do whatÂ's right.
Subscribe to Coupon Saver Blog