A GUIDE TO YOUR PERSONAL INCOME TAX: STEPS TO TAKE BEFORE APRIL 15
Taxpayers, remember these two dates when filing your tax return: December 31 and April 15. We have previously discussed what to do before the year ends. Today, we will tackle the moves you need to make before April 15.
The April 15 IRA contribution deadline enables you to at least partly offset the taxable income by allocating money for retirement in a traditional individual retirement account. The same deadline applies for Roth IRAs and Coverdell Education Savings accounts.
But first things first: find the paperwork for filing your tax return. Some of the documents come from third parties, including Form 1099-R, K-1, or W-2. You will not be able to file your taxes without knowing the precise amount on these forms. Providing the closest figures won’t suffice as the Internal Revenue Service uses their computer system to automatically match up the information submitted by you and your employer.
Should you fail to obtain these paperworks by January 31, you need to track them down before April 15. To start off, go online. Most financial institutions provide an electronic version of these papers, which you can print or download straight into the tax preparation software.
Forget not the deductible forms such as the Form 1098. The document indicates how much deductible interest you have paid on items, including mortgage or student loans. Several taxpayers tend to overlook these forms until they are discussing these matters with an accountant.
For self-employed taxpayers and other people who still need to meet other requirements, make quarterly estimated payments to the IRS. Such payments are in lieu of the withholding which would normally be deducted from a paycheck if they were employed by another entity.
Before the hustle and bustle of holidays entangle you, mind your taxes and its deadlines. If you are filing the previous year’s return by the beginning of February or settling the entire balance, you are exempted from making a January 15 estimated payment.