Whenever it comes time to file taxes, we all want to know the essential things. However if you are an expert, well then you know everything. But we wanted to cover the basics of tax for those who are starting on this journey. What are the essentials documents you will need, how your tax will be calculated, and how much you will have to pay? You can do all this via Tax Calculator, But knowing some essential things will save your time. So, here they are presented to you.
Don’t Pay Late
Many of us thinks, so what if I pay my taxes late. It’s not IRS that will charge me more. Well this is precisely the case. If you file late, then you may end up paying more. File the taxes on time; you can always for extended payment dates. The Failure to file could cover up to five percent of your tax. Now, you can understand how essential is to file on time. If you fail to pay after filing, then the penalty is 0.5%. The assessed time is for five months.
What if you want a refund after three year
When the government owes you money, you want to take it. Well, some of us do. But many people forget about it since they are busy filing taxes and make sure not to get a penalty. So, if you are due for a Tax Refund, make sure to check it out. Otherwise let’s say after three years long, you remember there was expected. Well, if want to claim it, you can’t. Because now it is forfeit. In a nutshell, if you are eligible for a refund, do it Asap. Please do not wait for it.
Itemize Deductions are Not Necessary
So, if you are paying attention to the news, then you would know this. The standard deduction will be double after the new tax cuts when you are ready to file next year, then Ready to receive more funds thanks to the jobs act and tax act. For example, if you have a single taxpayer, then your deduction will increase from $6,350 to $12,000. The heads of Household will see their increase deductions from $9,350 to $18,000.
Essential Things About Charitable Gifts
Now, what if you are giving charities and want to write off the eligible donations. However, as we said earlier, now the standard deduction has been increased, you may not be able to write it off quickly. But for Senior Citizens, it is still possible to do it. There is a term called RMD ( Required Minimum Distribution). If you can direct a portion of your income to a charity, then the money will not be taxable, thus not increasing the Tax brackets into higher incomes. Overall, saving some dollars. The other way is to donate their stocks. If you are finding it difficult, you can use a Tax Calculator for knowing your taxes. Read more about taxes in USA here.
So, these are some of the basics of the tax; you need to know if you are ready to file taxes. There are more points to it, which we will cover in the next blog.