Get ready to file some taxes!
Tax season is almost here, and we all know very well what that means—deadlines, paperwork, and questions about deductions, credits, and filing strategies. This is not the most fun time of the year, but it’s a process we have to go through year after year, and this is a good enough reason to be prepared.
But filing your taxes doesn’t have to be a stressful experience. Hopefully, if you know the right tips and tricks, you will be able to get over this period quickly and then relax knowing that your taxes are in good hands. Actually your own hands, but now more experienced and prepared for what is coming.
There are a couple of things that you can do to make all of this easier, and we are here to reveal them to you. Learning more about them doesn’t take a lot of time, and we can assure you that the invested time is totally worth it. Ready to find out more? Filing taxes has never been easier!
A last-minute estimated tax payment is a great idea
If you’ve fallen short on tax payments during the year, you might get a consistent tax bill and also some penalties along the way. It’s ok; sometimes this happens, but it’s important to know how to handle the situation.
According to the IRS, taxpayers have to meet some specific requirements and also some rigid payment thresholds to be able to avoid an underpayment penalty. 100% of last year’s tax liability (110% for those with adjusted gross incomes over $150,000) or 90% of the current year’s tax liability.
If you’re realizing right now that you’ve underpaid, don’t worry because you still have time! You should start making an estimated tax payment by January 15 since this can stop additional charges from being added. It’s true that this will not erase penalties for earlier quarters, but you still win something.
If by any chance your income increased significantly after August 31, you can still file Form 2210: Underpayment of Estimated Tax because this will annualize your tax liability, and as a result, it can lower penalties tied to earlier quarters.
Get the right tax form
One of the first things you can do for a better tax season is to gather the right forms beforehand. Unfortunately, you won’t find all you need for your taxes at the library or post office. But since we live in the age of technological advancement, you can use the internet and get all the right stuff from there. It’s very easy, and you will be thankful later.
The IRS website offers a comprehensive catalog of tax forms and publications, and all of them are available for you to view and download. Or you can even get them delivered to you by mail! Simply search by form number or date to locate the exact paperwork you need.
If you have to deal with state taxes, don’t worry because the IRS website can also guide you to various websites you can use to access state-specific forms and publications.
To make things even simpler, you can try to use tax preparation software like TurboTax. Why? Because such software has all the necessary tax forms preloaded, this only means less work to do for you.
Be aware of your filling status
Believe it or not, your filing status is one of the most important parts when you are doing taxes, and many people forget to pay attention to it. But this is the one single thing that determines your standard deduction, tax brackets, filing requirements, and eligibility for credits. Hopefully, since it is so important, it is very straightforward to find out what your filing status is.
Here are the five main filing statuses you need to be aware of. The first one is single. If you are unmarried, divorced, or legally separated, this is your status.
Then we have the head of household, and this applies to you if you are single but you are paying more than half of the living expenses for yourself and a qualifying dependent.
The next one is married filing jointly and is quite simple to understand what is going on. If you are part of a married couple or you are widowed in the same tax year, this is your status and is also the one that provides the best benefits.
But if you are married, you are not bound to file taxes together. This is why the status Married Filing Separately is a thing. This one is not that common, but in some cases, it can save you some money.
And last but not least, Qualifying Surviving Spouse. This applies to you if your spouse passed away within the last two years and you have dependent children.
Always provide dependent taxpayer IDs on your tax return
This is a non-negotiable thing. If you have to include children or other dependents on your tax return, you also have to include their Taxpayer Identification Numbers (TINs)—typically Social Security Numbers (SSNs).
Not doing this can have major repercussions, such as the IRS denying some important benefits like the Child Tax Credit or the Credit for Other Dependents. We know you don’t want this to happen, and this is why you should be careful.
Most of the time this is an essential step for divorced parents. There is only one parent who is able to claim each child as a dependent, and the IRS is trying very hard to reduce the number of duplicates. If it happens that both parents try to claim the same dependent or if a required SSN is omitted, you need to expect the process to take much longer because they will have to solve this problem.
Try to be as accurate as possible when providing this info because mistakes can cost you time and money. Always make sure you are double-checking numbers and names against official documentation.
Be aware of tax scams
There is no wonder that tax season is one of the favorite times of the year for scammers. They are the ones who use their tricks to prey on the unsuspecting taxpayers. Your taxes are just another money machine for them, and they will never shy away from trying to scam you.
One of the most common scams they use is the phishing attempt. Scammers posing as the IRS, try to gather sensitive information or demand immediate payment. Phone calls, text messages, and emails: they use all of these methods to reach their victims.
It’s important to note that the IRS will never try to reach you like that, and in case you encounter such scams, you should report them at this email address: phishing@irs.gov.
Another important concern is tax identity theft, in which thieves submit false returns for taxes to claim refunds with stolen Social Security or tax identification numbers. If you discover that a return has already been filed in your name or if you observe evidence of tax identity theft, contact the IRS immediately. To warn them and protect your records, fill out Form 14039, an Identity Theft Affidavit.
Do you want to find out more about how to deal with taxes and the IRS? Well, we have a solution for you! Get ready to find everything that you need in this book: Dealing With The IRS: Proven Strategies to Reduce and Resolve Your IRS Tax Debts
You should also read: Curious Who Will Pay for Trump’s Tariffs? You Will!
