What are the requirements to file a tax return ?

​You are required to file a tax return if your income is above a certain level, which varies based of your filing status, age and the type of income you receive. However the IRS reminds us that some should file even if they are not required.

Tax Planning

Start a filing system to organize your documents.

Any successful tax planning strategy requires you to maintain records of all transactions and receipts that may affect your tax return. This helps to keep track of important documents and avoid forgetting about transactions that occur months before the tax filing deadline.

Evaluate the Tax Credits Offered

The goal of tax planning  is to arrange your financial affairs so as to minimize your taxes. You can reduce your income, increase your deductions, and take advantage of tax credits.

It involves maintaining accounts, filing the tax returns, calculating tax deductions and the payment of the tax itself. With all this in place, tax planning, can help  reduce your future tax burdens.

Tax planning is an essential part of a financial plan. Through tax planning, all elements of the financial plan work together in the most tax-efficient manner possible.

Note:

What are we trying to accomplish ?

Understanding Tax Deduction Requirements

Tax credits offer a significant opportunity to save money on income taxes since they reduce your actual tax bill on a dollar-for-dollar basis. The types of tax credits offered each year change more frequently than deductions. Credits are often available for a limited time and cover specific types of expenses.


For example, the federal government currently offers taxpayers a credit that covers 30 percent of an unlimited amount of costs to purchase and install solar-energy equipment such as energy-producing solar panels. As long as the product includes a certification by the manufacturer that it satisfies government requirements, you can claim the credit.


Therefore, if you are planning to install solar panels on your roof this year, but are unaware of the credit, you could miss out on an opportunity to save money. And if you find out about the credit after you install the panels, you run the risk of being ineligible for the credit if your panels do not include a manufacturer’s certification. By knowing the requirements before you purchase the panels, you can insure you are eligible for the credit.



Before you get too far along in the tax year, you should evaluate all available IRS deductions and the requirements to claim them. By doing this beforehand, you can be proactive in preparing to claim a deduction at the end of the year

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For example, if you know you are heading back to school soon and will need a loan to pay your tuition, it may be better to take out a student loan rather than using a credit card. This is because you can deduct the interest that accrues on a qualified student loan, but not on a credit card, even if used for educational purposes.

What Information do I need to file a tax return?

When filing a Tax Return will need to provide proof of income from all sources as well as proof of qualified expenses for your deductions.