4 Things You Need to Know About Taxesby Agro Accounting CPA Accounting for Artists, Freelancers & Creative Com
Tax planning is important for everyone, including people who traditionally don’t file a tax return. Whether you file on your own or hire income tax services for freelancers, you need to know what your filing obligations might be and how your choices can affect your bottom line when it comes to money.
Here are the four main things you need to know about taxes:
1. You may not have to file a federal income tax return
Not every person who earns income during the calendar year has to file a federal income tax return. There are a number of factors that affect whether you have to file, including how much you earned and the source of that income, as well as your filing status and your age. The quick formula for most taxpayers is to find their standard deduction and to compare it to their income.
2. Even if you don’t need to file a federal income tax return, you may still want to take advantage of tax breaks and credits
Tax credits are dollar-for-dollar reductions of your tax dues and are usually more beneficial than tax deductions, the latter which simply reduce your taxable income. Additionally, sometimes, as with the American Opportunity Credit (AOC), you can get money back with tax credits, even if you don’t owe any tax. Working people with low to moderate income can benefit from the earned income tax credit.
3. You should file a tax return even if you can't pay your tax bill
You may have to pay penalties for failure to file a return and failure to pay your tax. To reduce the hit on your wallet, be sure to file your return even if you’re going to owe money and are unable to pay up. There are various options available, including payment by credit card and a payment plan with the IRS, if you are unable to pay your entire tax bill by tax day.
4. Due dates matter
If you don't file and make your payments by your due dates, you can be charged penalties and interest, which can add up quickly. There are limits on how much time can pass before the IRS may no longer assess and collect on federal income taxes due, which is sometimes called the statute of limitations. However, if you don't file your return, there is no statute of limitations. This means that the IRS can generally assess and collect payments from you at any time.
With this easy and simple guide to filing your taxes, you can file your taxes in a correct manner and in numerous ways. You can do them yourself, use tax software or an online program, get help from a Certified Public Accountant, or obtain the help of income tax services for the self-employed. Always be sure to take the guidance of a professional before filing your taxes.
Created on Feb 14th 2022 06:56. Viewed 68 times.