All of the earning people are required to pay taxes to their respective governments in some form or the other. The taxes that you pay fund different works and needs of our society. No doubt, majority of us feel burdened by the tax policies but these are basically aimed at improving the society or country as a whole. If there would be ways to reduce the taxes, then we all would like to avail them.
Careful tax planning or smart tax planning is what can save you a lot of money as well as time. Paying less tax doesn’t imply that you are committing any sort of fraud or something; it’s just that you are saving money wisely and legally. To save on your taxes you need to be well aware of the existing laws as well as the exemptions. There are many law polices that can give huge tax relief to the individuals as well as the businesses.
It is preferred that tax planning is done by a specialist who is well acquainted and well versed with specific laws pertaining to state or country. Also, these are the best people to handle crucial as well as sensitive role of planning tax payments as well as strategies of the company.
Paying less tax through smart planning is something which all of us wants. You just need to spend some time in searching and assessing the information pertaining to tax and can also file tax returns online easily.
Federal tax laws are no doubt complicated but they are important for people as well as the government. By understanding these simple laws, we can easily economize our hard earned money at the time of tax filing. Some events happen in our lives that changes the tax circumstance in the year or their occurrences. These events usually are not taken into account while calculating taxes and IRS Tax filing; however knowledge about these events is required.
– Child adoption- If you are going for child adoption then you can qualify an IRS tax credit concordant with the federal tax laws. It is not a tax deduction however it serves as a credit and thus helps a lot in reducing your bottom line taxes. A person who has adopted a child is eligible for reimbursement.
– Payment for education – Federal tax laws makes all the college expense including tuition fees eligible for tax deductions. Broadly speaking, there are two types of tax deductions when it comes to payment for education and these are “lifetime learning credit” and “hope credit”. You should try to know more about these two situations.
– Losing of jobs- Money received as a monetary benefit or as severance package due to unemployment is likely to taxed. However, the expenses that are incurred by an individual in searching for livelihood or a job are eligible for tax deductions under this law.
– Victim of disaster- Federal authorities gives special priorities to the disaster victims.
If you are unable to file your tax on time then you can request for automatic extension of tax return of Form 4868. You can take this form from the IRS website. Until recently, the IRS extension used to exists for only four months, but now it extends to a good six months. A taxpayer needs to state the reason why they need additional two months to pay taxes.
Taxpayers who want to avail tax extension must file this form by regular date of filing the tax returns. Taxpayers may chose to file taxes physically or they can do it online by using a popular tax preparation software or website. Taxpayers can send the Form 4868, but they cannot e-file the form.
For mailing Form 4868, it is recommended that you use a certified mail and request for a return receipt. Taxpayer need not sign the Form 4868 or send any kind of payment along with it. However, he or she has to make a bona fide estimate of taxpayer’s liability for the year passed and have to show any such payments already made. If the taxpayers fail to make a bona fide estimate then there are high chances of your form application getting rejected.
Taxpayer need to send payment along with the extension request. If he is e-filing the request then he can send the payment by credit card or electronic fund transfer. A tax extension allows a taxpayer more time to decide how to utilize his funds for payment of taxes.