Tax season doesn’t have to be a daunting experience. By following some essential tips when filing your IRS tax return, you can avoid miscalculations and prevent the accumulation of tax debt. These tips are applicable to individuals earning money in various ways, whether through employment, self-employment, small business ownership, or receiving passive income or government assistance.

For employees, it’s crucial to ensure that your W-4 form is correctly set up. The W-4 provides your employer with information on how much tax should be withheld from your paycheck. Factors such as your tax filing status, number of dependents, and additional withholdings are taken into account when calculating your tax withholdings. It’s advisable to review and update your W-4 whenever there are significant changes in your life, such as marriage or the birth of a child. Adjusting your W-4 allows you to align your tax liability with your current circumstances, and you can update it at any time during the year.

Save Yourself From Future Tax Debt With These Filing Tips
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Self-employed individuals are responsible for estimating their own tax withholdings throughout the year. The IRS provides resources to help calculate potential taxable income based on estimated earnings for each quarter or the entire year. Quarterly tax payments should be made based on these estimates to avoid a large tax bill when filing. The due dates for quarterly payments are as follows:

  • January 1 – March 31: Pay by April 15
  • April 1 – May 31: Pay by June 15
  • June 1 – August 31: Pay by September 15
  • September 1 – December 31: Pay by January 15 of the following year

It’s important to note that even after paying federal income tax, self-employed individuals must also pay Federal Insurance Contributions Act (FICA) taxes.

To streamline the tax filing process, it’s beneficial to start gathering necessary documents and requesting important tax documentation early in the year. Common documents required to file a federal income tax return include:

  • W-2 earning statement from your employer
  • 1099-MISC earning statement from clients if you earned income as a freelancer or contractor
  • 1099-G earning statement for government assistance, such as unemployment benefits
  • 1099-R earning statement for retirees
  • 1098-T tuition payment and student loan interest statement
  • 1099-DIV or 1099-INT earnings statement for dividends and investments
  • 1098 mortgage interest statement

Online tax filing provides an efficient and accurate way to submit your federal income tax return. Utilizing e-filing services with user-friendly calculators simplifies the process, automatically filling out IRS forms and performing necessary calculations. Many of these services even offer free online tax filing options. It’s recommended to compare different tax preparation services to find the one that suits your needs best.

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By Admin