Taxes

Tax Filing Tips

Filing tax returns is the single most frustrating task for most Americans. Still, every citizen has an obligation to do it. Admittedly, it is not the simplest thing to do and the average person spends more hours than they can afford preparing their taxes. Add to that the many mistakes one is bound to make. With these tips, we hope that you will be able to less time preparing taxes and avoid some of the most common mistakes.

Tax filing tips
Tax filing tips

To help you along, here are the Income-related documents you need to have:
– Form W-2 for employers you and your spouse worked for during the year
– Forms 1099-MISC for miscellaneous income
– Forms RRB-1099 for Social Security/RR1 benefits
– Forms 1099-R for Retirement Plan Distributions such as pensions, IRAs and annuities
– Schedules K-1 for Partnership, Corporation and trust income
– Forms 1099-G for unemployment compensation

If you have investments, you will need to have these forms:
– Form 1099-B to declare the proceeds from sale of stock and other indices
– Form 1099-INT to declare interest income
– Form 1099-DIV to declare dividend income

Homeowners need Form 1098 for mortgage interest and Form 1099-S showing the sale of your home or other real estate property. If part of your mortgage debt was cancelled, you must indicate it in Form 1099-C. If the cancellation was on your main residential house, you are exempt from paying tax. You will need to fill Form 982 for this.

If you are not hiring a tax preparer, use tax software for your tax calculations. It is so much easier than doing the math on your own and will help you avoid many mistakes. Check every angle for deductions you could qualify for which can make a huge difference in the amount of taxes you end up paying, from medical and self employed health insurance to work-related, property, real estate, and state tax deductions.

To meet the deadline and avoid penalties, pay as early as possible. If you have no time to file by the due date, ask for an extension via Form 4868. Note that this is for filing only, not paying. Your payments must still be made by the IRS deadline.

 

Free Electric Tax Filing

The process of filing for taxes is one considered tedious and somewhat inconvenient. As such, the opportunity to do it remotely is a welcome one for most individuals and businesses. It is with this in mind the Internal Revenue Service provides an opportunity for one to file their taxes electronically. There also other avenues to do this that are affiliated with the Internal Revenue Service.

The advantages, apart from convenience, are two other important aspects: the filing process safe, and free. There are also significant reductions in the time that one needs to wait for a tax refund, with the period being cut in half in some cases. Another often quoted advantage is that if you have arrears or back payments owed to the Internal Revenue Service, the electronic filing process provides you with more options through which you can remedy this problem.

Within the Internal Revenue Service, the process is of filing taxes called the IRS e-file. It has been available since 1990.

The option that is provides for one to file their tax returns freely is called Free File. Free File is open to individuals with an annual income below $57,000 and there are a number of ways a person interested in this facility can access it only through the Internal Revenue Service website, www.irs.gov.

For those wishing to file for their taxes electronically that are open to any income bracket, one can use by forms that are called Free File Fillable Forms. These forms support simple mathematical formulae and can’t be used for the more complicated state tax returns.

There are some tax software companies that can provide you with support software that can be used to file state tax returns. These are also found in the Internal Revenue Service website www.irs.gov. and as such can be trusted with your tax information since they go through a verification process of sorts.

You can also decide to handle the process yourself, especially if you have a working knowledge of how to file your taxes and the calculations involved. E-file software is commercially available and once you have processed the information, you can then send it through the secure channels available through the Internal Revenue Service website.

Yet another method is to use a tax preparer. The law requires that these tax filing professionals be well-versed with the e-filing process and it also makes practical sense for them to be familiar with it. This will certainly help one enjoy the benefits of e-filing while also leaving the process in the hands of experienced professionals.

The Internal Revenue Service provides you with various directions and steps that can help you select which form of electronic tax filing-works for you, making the process conveniently user-friendly.