The tax filing deadline is rapidly approaching and most of us are still scrambling to get our paperwork together and complete our return. While most of us think we are doing a good job maximizing our deductions and reducing our tax liability, the fact is that a large portion of people will miss some key points and could even have added tax liabilities. To avoid tax debt, be sure you are on the lookout for these ways in which your tax bill could be higher this year:
Forgiven debts — if you have any debts on accounts like a credit card, medical debt, or student loan forgiven the IRS could consider that amount income and apply a tax. However, not all forgiven debts are considered taxable income. If you were to have these debts forgiven in Dallas bankruptcy you are less likely to be held liable for that forgiven debt.
Retirement fund withdraws — if you withdrew money from your 401(k) or other retirement and are younger than 59 years old, you may owe tax penalties for early withdrawing of funds. Some fund account holders will require you to pay the taxes at the time of the withdrawal, but others do not and you will need to claim that liability come tax time.
Benefits income — if you have been receiving unemployment benefits you should know that the previous tax exemption for unemployment benefits has expired and income from unemployment benefits is once again taxable. While you can apply to have taxes withheld from your unemployment check, that won’t help you much this year if you have been receiving a full check.
Miscalculation of withholding — if you have made any changes to your household like getting married or having a baby your withholding tax could be inaccurate. Many people forget to adjust their withholding tax after such life events and the amount of taxes withheld from your check could be too low, leaving you with a tax bill each at the end of the year.