Don’t Forget These 6 Steps While Filing Your US Taxes in FY 2018
On paper,the filing of taxes just limited to one day. However, in most probability, it takes much more efforts. Sometimes, even an entire year’s planning, if you wish to be on the top of taxes. Whether you are filing taxes for the very first time or are a seasoned campaigner at that, there are few things not to forget. Keeping these in mind will help you file taxes more efficiently and avoid IRS from scrutinizing your filing closely.
1.Need to file
The first thing that you need to figure out is whether or not you are required to file for taxes. There are a few factors that decide the tax liability of an individual such as the status of filing, age, or dependency. An example of the same would be, an individual who is less than 65 years and has an annual income of less than $12,000 might not actually have to file for taxes. Thus, take a few moments to assess your tax liability and need for filing taxes.
Whether you a first timer or have prior experience in filing taxes, it is crucial to be prepared and organized. Staying calm and organized will make the entire process much smoother. If you wish to add deductions to your filing, ensure that you keep receipts or proof for the same. Maintaining a separate file for taxes is the ideal way to go. When you keep all tax related information at a single place, it becomes easier to deal with it.
3.Exemptions for Dependents
As already mentioned, it is important to know what your status is while filing for taxes. The status is even more crucial for first time tax filers or students getting into jobs. If your parents have added you as dependent in their tax filing, you must let go of exemptions. A qualifying child cannot claim for tax exemptions and neither can their parents.
There are several clauses in the tax laws which allows citizens to deduct certain expenditures. One must not overlook or ignore these expenses or deductions. Simply because they can reduce your tax liability by a handsome margin. For the year 2017, the average deduction for single tax filers stood at $6,350 and for couples who filed together, it was $12,700. Being aware of the different deductions available can help you save a considerable amount of money in taxes.
The tax laws vary depending on the state of which you are a resident. The state tax returns also follow a similar schedule as the federal taxes. Thus, it is important to find out whether or not your income is taxable as per your state tax laws and which expenses qualify as deductions as well. Some of these could be related to your vehicle or home while others could be related to your job.
6.Verify your documents
Firstly, you need to keep a close eye on your mailbox since most employers and companies send out the W-2 or Form 1099 via emails. Once you do receive them, ensure that you scrutinize the details. If something is wrong with the W-2, ensure that it is corrected at the earliest rather than waiting for the deadlines. Thus, take some time off and verify all of the supporting documents for their authenticity and accuracy. Some time spent on this up front will save you from a lot of pain down the road.
These are a few things that you should not forget while filing your taxes for the financial year 2018-2019.