Tax Management – How Much Should You Be Paying?

Tax Management - Complete Controller

If you have thought that because you used to be a salaried employee in the last five years, you should not have submitted an annual statement, you may be in error. The tax authority may require you to catch up.

The Tax Administration Service (SAT) establishes assumptions that you should have complied with this obligation despite being salaried. So, do not forget, since you are a taxpayer, the authority can send you information requirements for up to the last five fiscal years.

The IRS acknowledges saving some money to live on and to run an enterprise. Some of the small businesses’ tax-saving strategies, like timing expenses and income, must be accomplished before t, but some, like funding retirement, can be done at any time before you file the tax return. Check out America's Best Bookkeepers

Here are some strategies that you may use to manage your tax.

  • Funda retirement plan
  • Take tax credits to lower business income
  • Purchase vehicles and equipment for depreciation deductions
  • Time your expenses and business income
  • Write off any bad debts to reduce income

List of documents you must make taxes

The list of documents you need to file taxes varies by person. You can see a complete list on the US Department of Taxation website, better known as the IRS.

These are some of the most common forms you will need to submit to file your tax return:

  • W-2
  • 1099-MISC
  • 1098
  • 1095-B
  • FORM W-2

Employers have a deadline of January 31st to send W-2 forms to all their employees. Form W-2 is a statement of the salary you received throughout the year. If you worked in several companies, you should receive one of each.

FORM 1099-MISC

If you did work by the contract, you would need the 1099-MISC form to be able to make your tax return.

FORM 1098

Form 1098 is a statement of the interest you paid during the year on your mortgage. Banks send these forms to people who own a home and who are still paying for it. Check out America's Best Bookkeepers

Form 1095-B

Form 1095-B is sent by the insurance company to verify that you purchased health insurance coverage and how much you paid for the premium.

Other requirements and documents you will need 

In addition to the above forms, taxpayers will need information such as their social security number or ITIN, their spouses if they are married, and their children’s social security or ITIN numbers. If you are married and are going to file a tax return with your wife, you will need to have your W-2 forms.

To receive their refund as soon as possible, many people go-ahead to do the taxes. Many times, they do not have enough documentation and make incomplete statements. It is better to wait, gather all the documents, and look for a tax preparer certified by the IRS to help you with the process.

Remember that these are just some of the documents and requirements necessary to do the taxes. Each case is different. For example, people who made donations to charitable or tax-exempt organizations such as churches will also need your voucher or receipt to claim that amount in taxes.

Among them, if you have an earned income higher than $20,000.00 in the year if you changed the government or stopped offering services before December 31st of the corresponding fiscal year. If you received income from two or more employers at the same time in the year and if you received other cumulative payments for the lease, fees, or business activities, in addition to your salary. Check out America's Best Bookkeepers

What may happen here is that you are charged with fines and surcharges. When the authority makes invitations, it is best to get up to date as soon as possible to avoid such situations. Typically, in the information requests of the SAT, you are asked for evidence of income and suppression as a salaried employee. If you are a natural person with the business activity, you must present deductions, such as electricity, water, or telephone.

Some people receive more than $20,000.00 a year and do not make their statements. If the SAT notices that you did not do them in the last five years, they will likely review and request information from the previous ten years.

The requisitions of information and precisions of the last five years can be derived from the wrong delivery of an annual declaration and tax refund request.

What should you do?

Register in the RFC with the SAT. When you are a salaried employee, your company registers you, but you must do it if you are a freelance. If you will make an annual statement, take out the FAITHFUL.

Whether you are a salaried or a freelancer, you can take from taxes the expenses you make on medical insurance, doctors, tuition, dentists, etc. Up to 15% of your income or five minimum wages per year.

If you are a freelance, get your CSD and sign up with an Authorized Certification Provider (PAC) so that you can issue fee receipts or electronic invoices for yourself. To deduct, you must have the electronic invoices that prove the payment of the services with a card or transfer, and you must make your annual declaration.

Check out America's Best Bookkeepers About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity. Check out America's Best Bookkeepers