It can be complicated trying to estimate your tax obligations. Some people set aside too much money from their paychecks throughout the year, leading to a refund after filing. Others don’t set aside enough and wind up owing money to the IRS. You may need back taxes help if you miscalculated what you owe, were caught hiding income, or otherwise got behind on your financial responsibility.
Taxes can be a bit trickier if you own a business or are self-employed. For one, an employer is not automatically withholding your income taxes. The IRS can fine you for not paying your estimated quarterly taxes throughout the year.
Many U.S. employees are familiar with Form W-4, which is a sheet that you submit to your employer telling them how much money they should withhold for taxes. Typically, this is based on the amount you earn.
If your situation has changed since you first completed your onboard tax forms, your employer may not be withholding the correct amount. For instance, if you received a significant raise but did not submit a new W-4 reflecting this, you might not be withholding enough.
There is certain information that you need to keep current for tax purposes, including the following:
- Filing status: single, head of household, or married
- Children: number of dependents you can claim
- Additional withholdings: such as if you earn extra money through freelance work
If you work for yourself, you generally must estimate your tax responsibility and make payments quarterly. The IRS could penalize you for not making the required payments on the due dates.
The four payment periods and payment dates are as follows:
- January 1 to March 31 – April 15
- April 1 to May 31 – June 15
- June 1 to August 31 – September 15
- September 1 to December 31 – January 15 of the following year
It may be helpful to gather all of your documents before preparing your return. Here is a list of some of the most common tax forms needed:
- W-2 includes information about your total annual wages and withheld taxes for an employer.
- 1099-MISC has total earnings from businesses you worked for as a contracted worker, like a freelancer.
- 1099-G has certain government payments, like unemployment compensation.
- 1099-R has retirement plan distributions and other retirement income.
- 1098-E and 1098-T have your student loan interest and tuition statement.
- 1099-DIV and 1099-INT have earnings from dividends, capital gains distributions, and interest.
- 1098 is your mortgage interest statement.
If you received advanced tax credits for health insurance, children, or economic stimulus payments, you should include those in your tax return as well.
Usually, the fastest way to file your tax refund or return is electronically, and you can receive your payment quicker with direct deposit. An electronic filing skips delivery time and can reduce delays from:
- Inaccurate filings. The IRS might reject your federal income tax return if you made mistakes or are missing information.
- Lost mail. Mail delivery increases the risk of your tax refund or return becoming misplaced or damaged. The IRS may also charge you a late fee if the agency does not receive it on time.
- Fraud and identity theft. You may not be the only person looking for your refund and payment. Your tax filing has a lot of personal information, including your Social Security number. Scammers can more easily get these details and cash your check through non-electronic methods.
By Admin –
