What you need to know – Boston 25 News

WASHINGTON — In case you forgot to take note, taxpayers who requested an extension of time to file their 2021 tax returns have until Monday, Oct. 17 to do the deed.

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In turn, 10 Free File products are available online, eight of them in English and two in Spanish.

The service, which allows individuals to electronically prepare and file their federal tax returns for free online, using guided tax preparation software, offers two options:

  • IRS Partner Sites are for individuals with adjusted gross income of $73,000 or less.
  • Free forms to fill out are intended for taxpayers with adjusted gross income over $73,000, but anyone using this service should know how to prepare their own tax return.

According to the IRS, filing inaccurate or incomplete returns can cause processing delays, so make sure all necessary forms are submitted. Additionally, filing an error-free online return linked to a direct deposit account can also prevent stranded refunds and future notices from the IRS.

The forms required to complete an accurate declaration include the following:

  • Proof of each source of incomeusually in the form of W-2 forms provided by your employer, as well as Forms 1099-NEC for employment contracts and 1099-G for unemployment income.
  • Documentation of each cancellationincluding Form 1098 for mortgage interest, Form 5498 for Individual Retirement Account deposits, and Form 5498-SA for Health Savings Account contributions, among others.

Dotting the I’s and crossing the T’s in the front is the best way to avoid complications, according to CNBC. The network offered the following advice:

  • It is not because a taxpayer has not physically received payment for his investments that he is not taxable. Be sure to include Form 1099-B for capital gains or Form 1099-DIV for dividends and distributions.
  • Another common mistake is to omit Form 8606 for non-deductible IRA contributions. The form is required to verify contributions for Roth conversions, a step often taken to circumvent income limits for Roth IRA deposits, allowing for future tax-free growth. If you don’t provide proof of original deposits, you risk being taxed twice on the same income.
  • If you’re over age 70.5, you’re allowed to use qualified charitable distributions, or QCDs, to give away up to $100,000 a year from a pre-tax IRA. The tactic allows retired investors to reduce adjusted gross income, but the practice can cause errors on Form 1099-R, which reports retirement plan distributions. Jastrem of Heritage Financial Services told CNBC that brokerages do not segregate individual QCD transfers on Form 1099-R, and tax preparers must manually account for individual QCDs or risk the entire IRA distribution being reported. taxable.

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