Individual And Marriages

Tax advice and preparation.

For many people, tax season means stress. It does not have to be like that. There are many ways to prepare to file your taxes and receive the refund you deserve. Follow these tips to prepare your taxes:

Dedicate a place to keep all your documents: Depending on your situation—if you have businesses, investments, stocks, or IRAs—you may have many documents that you will need at tax time. Be sure to keep all of these documents in one place throughout the year, and if you haven’t already, start collecting them now to make your filing process easier.

Buy a tax declaration program for your computer: If you are going to give yourself the task of declaring your own declaration, install a tax declaration system for your computer with enough time to make sure that it works well, you have the most up-to-date version and that you are well prepared to use it.

Prepare an estimate: So that you are not surprised, before officially filing your taxes, prepare an estimate to see if you will have to pay tax or if you will receive a refund.

Save enough money: The estimate you prepare will help you plan how much money you have to save in case you have to pay taxes.

What information is needed for tax returns

A tax return is a document that must be filed with the government reporting the amount of income you earned in a particular year.

Income Documentation,

The first piece of information you need to start preparing your tax return is the total amount of income you earned during the year. Any employer that pays you a salary must send you a Form W-2 each year, which reports your annual income and the amount of taxes withheld. Independent contractors typically receive income reports on Form 1099-MISC . If you are a sole proprietor of a business, then you are responsible for collecting all information regarding the profit and loss of your business for later reporting on the attached Schedule C.

previous tax payments,

If you have tax withheld from your earned income during the year, you can enter it at the end of your tax return to reduce the amount of tax you still owe. Contractors or workers who receive 1099 income do not have taxes withheld and must make estimated payments during the year, which must also be entered on the tax return. Although Form 1099 does not reflect any tax withholding, your Form W-2 will report the total amount of tax you paid during the year.

Interest and dividend income

If you receive any income from an investment, you will usually receive a Form 1099 showing the type and amount of income that was paid to you. Interest received from investments typically includes interest from savings accounts and dividends received from shares you own. This is reported on Forms 1099-INT and 1099-DIV . Regardless of the type of investments you make, if you earn money you must keep track of it and report it to the IRS .

Report deductions and credits

There are several tax credits available that directly reduce the amount of tax you are responsible for paying. Some frequently claimed credits include the child tax credit, residential property energy production credits, and the Earned Income Credit . Each have their own eligibility criteria that you must meet.
Tax deductions, on the other hand, only reduce the amount of your income subject to tax and do not provide a dollar-for-dollar reduction in taxes owed the way credits do. However, all taxpayers qualify for certain deductions, such as the personal exemption (the personal exemption is available only for tax years prior to 2018) and the standard deduction . To qualify for any deduction or credit, you’ll need some basic information, such as your marital status , the number of dependents you have, and a list of your deductible expenses. You may need documentation to support your deductions and credits, as well as receipts for charitable donations you have made during the year.

WHY SHOULD I FILE TAXES?

You could be breaking the tax laws if you don’t file your tax return. As a result, you could pay extra money in penalties or interest, or you may have overpaid your taxes and are entitled to a refund that you wouldn’t be able to get if you didn’t file.

CAN I FILE TAXES IF I DO NOT HAVE A SOCIAL SECURITY NUMBER?

Yes. If you do not have a Social Security Number, the IRS can give you an Alien Individual Taxpayer Identification Number (ITIN). You use this number on your tax returns instead of your Social Security number.

The ITIN is for tax use only and cannot be used like a Social Security Number for other purposes. This number does not change your employment or immigration status and does not entitle you to Social Security benefits. An ITIN does not give you authorization to work.