It's tax time once again, and that means you need to gather all your tax information together to either file your own taxes or take them to a professional to have your taxes completed. There are a lot of rules and regulations when filing taxes, but there are also a number of things that can help a person when it comes to deductions. Here is a look at the complete 2016 tax day checklist when filing one's taxes on April 18.
What To Gather Together For Income
It's important to have everything gathered together for the tax purposes. Of course, the main things to make sure of is that any W-2s and 1099s from employment are all on-hand. The W-2 will be provided by most employers, and the 1099 forms are provided by income made outside of regular jobs. The 1099 can be from income made through self-employment, money made from interest throughout the year, money made from gambling winnings, and more. It's important to keep track of income throughout the year because even if someone fails to send a W-2 or 1099, that income must still be claimed on the tax form. Alimony and tips are also income that must be claimed.
What To Gather Together For Deductions
The most important thing for tax payers is to have all their deductions lined up. It's up to individual taxpayers to keep track of items that will lower their tax amounts as much as possible. Interest paid on school loans, alimony paid and charitable contributions are all tax deductible. Medical and dental expenses are also tax deductible if they reach a certain amount. All receipts should be kept, or at least a precise record of the expenses. Other taxes paid, such as state, sales, real estate and personal property taxes, are also deductible. Do not forget about these. Also, any losses from disasters or theft are tax deductible. Finally, do not forget to check on receiving Earned Income Credit for additional help.
Job Related Questions To Answer From Previous Year
It is also important to keep a close record of work-related costs. An example is auto expenses in the line of work. Business trips are tax deductible, but receipts need be kept to prove the amount spent. Mileage driven can also be tax deductible, but should be kept track of and written down to prove when and where the trips were taken. All work-related costs, including non-reimbursed expenses as well as expenses searching for a new job, need to be recorded and used here as well.
Home-Related Questions To Answer From Previous Year
There is also a number of items that a person needs to have information for when it comes to home-related deductions. The social security numbers of everyone in the household, as well as the number of dependents, need to be on hand. Whether a person was married or divorced will play into the tax owed as well. Education expenses, both those paid by an individual and those payed by an employer, need to be claimed. Major improvements on a home, buying or selling a home, moving in connection with a job, and more play a large role in the deductions.
Affordable Health Care Act
Finally, there is the Affordable Health Care Act. There are some crucial things that should be taken into account when putting together the information to file taxes. People owe a fee for any month they do not have health insurance. There is a stop gap exemption, so a person who is without insurance for two full calendar months does not have to pay. Otherwise, the penalty is 2.5 percent of the household income divided by the total amount of months uncovered.
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Shawn S. Lealos is a freelance writer who graduated from the University of Oklahoma in 2000 with a Bachelor's Degree in Journalism. He writes for a variety of national publications and has over 15 years of sports journalism experience. Follow Shawn on Twitter @sslealos. aExaminer.com.
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