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Income tax checklist & File your income tax return by April 15

File taxes before April 15
IRS waiting for taxes – Credit : GOODMagazine.com

Do not forget to prepare your tax returns by April 15 (referred to as “Tax Day”). IRS deadlines are strict and follow strict penalties for late tax payers. These days with online softwares like Intuit’s TurboTax Deluxe OR H&R Block TaxCut 2007 you can do your own income tax return. The choice of doing taxes by yourself or using a tax consultant (like CPA) depends on how complex are ones taxes.I bought a house with two mortgages and did numerous (company as well as from TDAmeritrade brokerage) stock trading this year so my choice going to be a CPA for year 2007 taxes.

Here is checklist of documents required to file taxes:

Proof of the income:

This includes W2s which are proof of income made through employers, interest from checking/savings accounts, dividends from stock investments, income made through self-employment like say Google Adsense or some other advertising revenues, and any other income. In my case I have my partial MBA Student tuition payments and other types of loans may also be considered income for the purposes of income tax, as can winnings from a lottery, casino, or other contest.It is always good to contact your tax adviser to know what qualifies as income for tax purposes

social Security Numbers:

You should have handy all social security numbers for everyone you will claim on your income tax return. That includes social security numbers for your spouse and any children you will claim. Without social security numbers, proof of residence, and birth dates, you cannot claim deductions on your income tax return for these individuals.

Deductions:

I have a mortgage, and interest paid to the mortgage company is tax deductible. If you use a vehicle or computers for business purposes, you can claim a tax deduction for mileage/usage.You can also claim tax deductions for charitable contributions.

Self-Employed:

Gather all your receipts for tax deductible expenses. A tax deductible business expense is any expense that is used solely or primarily for the business you are involved in. The tax deductible expense must be documented in order to claim it, so any receipts you have, usage logs for computers and vehicles, etc. should be gathered so that you can take the highest deduction possible.

Tax Forms:

An individual with few tax deductible items can file simple tax return. However, if you are self-employed you must also file a tax form called Schedule C.For lot of tax deductible items, you will want to file a more complex tax return to itemize your tax deductions.

Start gathering all of your required tax documents as early as possible, and be organized.

I like this video from “GOODMagazine” showing how our tax money is spent.


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Posted By: Kalyan | Date: March 3, 2008 | Categories: Uncategorized

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