Most people dread going into the tax filing season. Tax filing is an obligation that every citizen of the country who is able to file their taxes should and must do. Irrespective of whether you are employed, self employed, running a business or unemployed; everybody needs to file their taxes to keep the government updated as to your financial situation. The taxes we pay are our contribution to the running of the country.
Unfortunately, the reason most people dread tax filing is because they know very little about it. This article acts as your one stop guide to filing taxes.
1. Choose the Right Documentation
Tax filing involves filing in the right forms. There is a number of different tax filing forms that you should fill. Here is a look at some of these tax forms that you need to fill.
· Form 26 AS
This form basically lists down the payments that your business has made to you in the financial year. The money need to be tax deductable and should be paid. This form also includes details of any advanced tax that you may have paid during the financial year.
· Form 16/16A
Form 16 is usually granted to salaried individuals. The form is available from April to June and needs to be filled with care.
· Income Statement
This is admitted to your tax return with the Form 16/16A. The income if any that you generate from your sale of investment and dividends is also recorded in this form as well as any other income that you may have earned during the year.
2. Deciding on Which Form to Fill
The form you choose will depend on your filing status and whether you are a salaried individual a freelancer or someone who is running their own business. Different forms cater to different people. Your marital status also has an important role to play in which tax form you go ahead and fill. In the tax filing process you can either be the head of the household, a dependent spouse or single. If you are divorced you will come under the single tax filing status.
3. Calculate Your Tax Liability
Once you have filled in your tax form, you need to calculate the tax that you are liable to pay. Not many people know how to calculate their taxes which is why there are a number of applications online that help you calculate your taxes. Whatever the tax amount you calculate, make sure you pay a little more than that to cover up for any discrepancy. If you pay more taxes than you should have, you will be able to claim and get a refund from the IRS.
There are a number of things that a tax filer can claim a refund on. Some of the things that you may claim a refund on include:
- Education expenses of your children
- Energy efficient home improvements
- Expenses to grow a business.
4. File Your Taxes
Once you have collected all the required information to file you taxes, you should go ahead and file your taxes with the IRS. Tax filing should be completed before the due date. If you think you cannot file your taxes on the due date, you can ask for an extension of a few days in the filing deadline by contacting the IRS.