7 Tips on the Individual Tax Return
7 Tips on the Individual Tax Return
The 7 tips on the individual tax return and Approaching year-end makes one think about federal tax returns because the Covid-19 pandemic has brought huge changes in tax filing. Many taxpayers need tailored suggestions on a tax break, ranging from unemployment to stimulus checks.
Anyway, early tax filing gives you an edge in terms of time and money.
Naturally, people want to pay no more tax than they should so you must maximize your tax refunds. To reduce your tax liability, ZAKIR CPA PLLC strategizes your financial policies and here are 7 tips on the individual tax return.
What are the 7 tips on the individual tax return?
Our savvy tax consultants in New York weigh in with their exclusive financial knowledge and skills so let’s get into the details.
1. Get a professional hand: 7 tips on the individual tax return
You could call for the best CPA assistance in New York and we give you the pro-tax tips you needed all along.
In 2021, your marriage, divorce, new business, SBA Loan, EIDL, Advance EIDL, NYS small business grant, rent assistance, stimulus check, advance child tax credit, or unemployment benefits could develop some tax complications because those issues might lead you to our leading CPA firm in the USA.
By the way let’s sneak into affordable alternatives to evade hefty fees on tax accountants.
Free File Alliance partners with the IRS to help U.S. taxpayers e-file their returns and annually your adjusted gross income should not exceed $72,000 to qualify for this service.
The Volunteer Income Tax Assistance program (VITA) runs a tax file program and they assist taxpayers with below $54,000 income also the disabled and limited English speakers qualify for their services. IRS-certified volunteers offer free basic tax preparation and e-filing.
However you can do the tax filing all by yourself and it includes a basic wage and income statement (W2) and a few deductions so this is the cheapest tax filing policy.
2. Put together all tax documents & financial records:
Solid tax preparation takes time and effort. But this can ensure smooth and faster tax filing.
A pro tip — the previous year’s tax return gives you great insights.
Claim a copy of that return via the IRS Online Portal. If you had resorted to a CPA firm in the last year, they gave you a copy of your return and the last year’s tax return points out many required documentation.
Required tax papers vary across professions and Employees, freelancers, unemployed, charities, students, investors, homeowners, and retirees need individual tax documents.
Documents like W2, 1099 MISC, 1099 NEC, 1099 K, 1098 T, social security of all, date of birth for all, Home address, Email address, Phone number, Bank account, and routing number, etc.
3. Precise timing increases your tax refunds
Throughout the calendar year, date and month-wise plans can boost your tax refunds.
ZAKIR CPA PLLC throws in some unique tax refund tricks:
- In the last quarter of this year, health treatments, exams, and expenses could facilitate medical expense deduction potential and you can check out the complete medical deduction list for 2021.
- Pay your January mortgage before December 31. Hereby, you get the added interest for the home mortgage interest deduction.
- Timely contributions to qualified charities bring you attractive tax refunds So maintain your charity records. The charitable contribution deductions help you.
- Freelancers and home offices can qualify for deductions as well. Before the year goes by, purchase your office equipment and software and thereby, you can boost self-employed tax refunds.
- Claim Child and Dependent Care Credit which is fully refundable and amount $8,000 for 2 qualified children and $4,000 for 1.
- Place and Claim credit for Home Office
- If you are losing on your stock business make sure you are claiming maximum losses in a year
- Or if you are showing rental income, make sure you are claiming depreciation for your house
4. File a tax extension
Any acceptable reason could extend tax return time. Remember, there is no extension on the due date of any taxes you owe.
If you owe taxes, make sure you pay by the filing deadline. Thus, you can reconcile it once the return is complete.
Incidentally, if you do not pay the tax you owe on the due date or you pay too little, you have to pay interest on the underpayment or even a penalty.
Also due dates for state income tax returns vary across geographies. Therefore, check your state’s deadline and this is crucial among all 7 tips on the individual tax return.
5. Beware of tax scams
Inevitably tax seasons see a rise in phone calls, emails, and text messages from strangers and certainly, they all claim to be the IRS.
Plain and simple these are frauds.
The IRS or the U.S. Treasury never calls you. So pay no attention to these fraudsters.
In case of litigations, government organizations would use the U.S. mail. And this is their only medium of official communication.
Moreover, naive taxpayers usually buy into incredible refund offers. Normally, dishonest tax advisors toss you into deep waters and they take you beyond tax laws. No good can come out of it.
Also identity thieves could lure you. Thus, they grab valuable personal and financial information so restrict yourself to encrypted electronic media while sending sensitive information. You must scrap all draft tax return copies.
6. Claim disaster losses
Lately frequent disasters are disrupting the lives of many Americans.
Well, the U.S. govt offers Tax Relief in Disaster Situations in a federally declared disaster area and hence, you can offset part of your financial damages.
Read the “federally declared disaster area” section carefully. Otherwise, you cannot claim this privilege.
The loss must relate to your home, household items, or vehicles and the deductible amount is reduced by any salvage value of your property plus the insurance payment you received.
In addition you might qualify for a net operating loss if your casualty loss outruns your income.
7. Generate an online tax account
Now, you can retrieve your online tax documents without cold-calling or mailing the IRS and set up an online tax account with the IRS.
It helps you check payment balances, initiate payment arrangements, view previous tax returns, and report tax forms.
However, this feature does not permit electronic tax filing.
ZAKIR CPA PLLC brings you 7 tips on the individual tax return. These guidelines minimize your tax liability or maximize your tax refund. You can also contact our 24/7 tax consultants in New York. Hands down, we are best at filing your tax returns. There are no think about and, but, so because it yielded the best.