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Taxes made easy – A sneak peek

Taxes come every year

Come April and we are all on our toes to meet the deadline for paying our taxes to the Internal Revenue Service. The ones that work out their taxes well are the ones that benefit the most. However, there is no need to dread the month of April as you circle off the date on your calendars. You will be able to tackle your tax issues efficiently if you do not wait for the last moment. You have your tax codes to deal with and tax issues that were made mandatory way back in the year 1913 as per the 16th Amendment passed by the Congress. Read on to know more about how taxes made easy for you.

Income and Deductions

State your income clearly. Income refers to gross income, that will include any kind of pension or other benefits you may be entitled to. First and foremost, assess what your exact income is. Once you’ve calculated your income, evaluate your deductions, which can be standard (available to all) or itemized (available to some). In this context, you need to address matters related to retirement plans and expenses related to your business. Working out the deductions gives you a clear idea of your actual income. This should make it easier for you to calculate your taxes. Get the value for the so called AGI or adjusted gross income.

Exemptions and Incentives

Once you are done with these calculations, now you can go ahead with the exemptions and incentives. It is important to note tax-exempt or tax-incentivized items because these items will alter your actual, taxable income. Thereafter, the actual income that is taxable is obtained after you take into account the figures mentioned hereafter. Be sure to also take into account energy incentives, dependent care, as well as adoption and seek guidance of tax professional as to how you ought to go about these figures.

Determine Net Income & Final Steps

Now you should be able to determine your net income, which is the figure the IRS uses to determine how much tax you owe. A systematic approach, like the one described here, definitely helps you go a long way. You must also keep up with payments. Once you are behind on tax payments, all that you need to do is opt for few of the tax debt options that can get you out of tax debt. However, in order to be eligible for these tax debt options, you have to be at least 3 to 4 months behind on tax payments. But you will not be required to face tax debt issues if you follow the “taxes made easy” steps mentioned above. If you are not confident about your tax returns, seek assistance of an experienced tax professional. Also hire an expert for your tax needs.