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In Banking-Finance

Nobody likes getting in trouble with taxes. Some errors may occur during your payment process. It can lead into a delay or other problems. Don’t let that happen to you. The IRS (Internal Revenue Service) offers tips to help taxpayers like you who are still working on your 2014 taxes.

Here are some steps you can follow to help you with your tax payment process:

  1. Learn to file electronically.

E-File or IRS Free File is available for taxpayers to fill. It comes with tax software that will do all the calculation for you. Common errors will be flagged for you to notice and follow up. And if there is any missing information, you will be prompted. However, if you are unfamiliar with filing electronically, you can choose to file them on paper.

  1. Check out for tax benefits before filing.

Sometimes people don’t notice some credits and deductions that they are qualified for, such as Savers Credit, for retirement plan contributing low and moderate income workers (on Form 8880); Earned Income Tax Credit for low and moderate income workers and families (check EITC assistant for help); American Opportunity Tax Credit (on Form 8863) and many others. Check them using the IRS Interactive Tax Assistant.

  1. Report your health care tax according to the health care law.

Besides checking a box on tax return indicating the health coverage, there are other forms related to health care law to fill such as form 1040, 1040A, and 1040EZ. These forms will affect the tax return. So report your health insurance coverage, claim the premium tax credit, make individual shared responsibility payment, claim exemption from the coverage requirement, and reconcile advance payment of the premium tax credit.

  1. Contribute in IRA (Individual Retirement Arrangement) in the right way.

Any taxpayers can contribute to IRA (either Roth or traditional). However, there are limitations according to the law. Check Publication 590-A form to make the right IRA contribution and avoid a 6% of excise tax (applies to taxpayers who contribute more that allowed).

  1. Assure your account numbers and data in claiming your refund.

Direct deposit method is the popular way chosen by taxpayers in claiming their refunds nowadays. In form 8888, you can see the details of this preference. However, some problems such as delay and misrouting often occur due to inputting wrong account. So make sure the data such as financial institution routing data and account numbers. You can track your refund status using a tool on IRS.gov, “Where’s My Refund?”

If you choose to do paper filing, there are many things you need to pay attention to. During the time of filling papers in the last minute and filling very fast, you often make errors and mistakes. These things are common on paper returns. Here are some most important and useful tips to help you with the paper filing:

  1. Fill in each requested Taxpayer ID or Social Security Numbers;
  2. Make sure to use the correct row and column for the claimed filing status and taxable income amount if you use tax tables;
  3. Sign and date the return (both spouses must sign the joint return filing);
  4. Attach all required schedules and forms; and,
  5. Mail it to the right address. You can go to IRS.gov and check Where to File for complete instruction on sending the return. If you send it on April 15, which is the deadline, make sure to do it early enough so it will meet the pick-up time as scheduled.

There is a new law allowing taxpayers to claim their return cash contributions. For further details, you can check IRS Publication 526.

If you need more time to file, request a tax-filing extension to avoid late-filing penalty. You can do this through Free File on IRS.gov or by designating extension payment.

If you owe tax, use form 1040-V payment voucher and pay using IRS e-payment, Direct Pay, or send a check or money order payable to United States Capital. In addition, if you cannot pay on April 15, you may see on Online Payment Agreement option if you are qualified for a set-up monthly payment agreement with IRS.

 

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