Filing your tax returns is equally important. If you fail to do so in the required period, you might be fined, and it is not a wonder to find yourself being denied a compliance certificate that is mandatory for anyone running a business in the US. In other words, if you do not want issues with the tax man as you traverse the year 2022, ensure that you have filed your returns as required. However, in case you do not know how to go about it, or probably you forgot the steps taken while filing a return, you do not have to be worried as we will take you through the process and ensure that you are not penalized this year for failing to file your returns.
Who needs to file a Tax Return?
This is a question most of us keep asking about for lack of knowledge or exposure. But you need to understand that not everyone is required to file a return. In other words, the art of filing returns depends on a person’s income, filing status, and whether anyone claims to be independent.
But if you are single and aged more than 65 years, you are supposed to file a return or not less than $14,050. However, if you are single and under 65 years old, you need to file a return for no less than $12,400. But suppose you are unsure of the amount to file. In that case, especially if you are married and working under a tax-complying institution, you can consult Fortress tax relief services and avoid making mistakes that might cost you dearly.
Tax Forms you need to File Returns.
If you receive income from various sources, you must file a return from all the sources. However, you might be confused about the details when filing these returns. But documents such as W-2, 1099, 1099-NT, and 1095-A are critical as they provide the necessary information required when filling some of these returns. The best thing about these documents is that you can access most of these details from your employer and use them to file returns.
Tax Credits and Tax Deductions
As you submit your tax forms, it is critical to claim all your tax deductions and credits you are entitled to. It is worth noting that these credits and deductions provide tax savings in various ways. In other words, your deductions will reduce the amount of income the government deems taxable and levies your income tax rate. This means that if you earn $5000 per month and deductions worth $1000, your taxable income will amount to $4000 because of the deductions. On the other hand, credits reduce one’s tax due to owing on a dollar-for-dollar basis. A credit of $1000 will reduce your tax bill by $1000.
Filing returns is critical for the growth of the nation. Therefore, if you have not been filing returns, it is a good time to start filling these tax returns as it is also essential for your economic growth.