Know the Penalties

If you find yourself having to file your taxes late, be sure you are aware of how much doing so will cost you. We’ve already mentioned the £100 penalty that you’ll have to pay, but unfortunately, this isn’t the only late tax penalty you may face. In fact, you may find that filing late could cost you £1, 600 in fines. If you leave your taxes unfiled for three months, you’ll owe £10 a day up to a maximum amount of £900.  After six months of unfiled taxes, a further £300 could be totted on to your total. After 12 months, you could see your owed tax bill rise by another £300. The moral of the story is: the longer you leave it to file your taxes, the more you pay.

Do it Online

More and more people are using the internet when filing their taxes because it’s quicker and much easier to use than traditional methods. If you have to file your taxes late, you’ll definitely want to consider the speed and efficiency of filing your taxes online. You’ll also want to consider the flexibility doing it online affords you.

Apply for an Extension

If you know you won’t be able to make the tax deadline, you could apply for a tax extension. Please note that applying for an extension will not exonerate you from meeting the tax payment deadline. You will still have to pay the estimate amount of taxes you owe by the due date. If you fail to make this payment, it could result in the penalties discussed earlier.

Plan your Capital Gains

You should double check your capital gains to see if you eligible for an exemption. The Telegraph reports that most people in the UK are eligible for a capital gains tax exemption of a certain amount each year, normally around £10,600. Because capital gains taxes can be a bit tricky, it is advised to speak with a financial adviser about your eligibility and your options surrounding capital gains tax.

Prepare for Next Year

It may be too late to save any money on your taxes this year, but you could get a jump on next year’s taxes now. Three of the best ways to pay less taxes are to: open up a tax-free ISA or a tax-free junior ISA. Saving your money in an ISA makes economic sense as it will continue to grow over time and when you withdraw, you will not have to pay taxes on the amount withdrawn from the ISA. The third way to ensure you pay fewer taxes in the future is by paying into a pension fund. Paying into a pension fund should help to boost your retirement fund.

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At times personal tax returns also come in the form of return of certain excess taxes paid by the individual over a given tax year. Known primarily as the tax refund, this is also another way of looking at the process. Under this system, individuals are required to use Form 1040, organizations Form 1120, partnerships Form 1065 and Investment Income Form 1099. A majority of large corporations or sole proprietors are known to file their tax returns on a quarterly basis. This actually keeps the whole tax balance running close to around $0 and therefore, avoids all oversized tax bills. To avoid such hassles, sign up for a professional bookkeeping service. Nonetheless, let us now guide you through the process of filling out the tax return form.

In the first place, fill out the forms by getting your answers printed on the blanks. For this, it would be advisable to use ink pen. You may even decide to type answers in the blanks. However, as you do so refrain from using cursive. Also make sure that the forms are completed with a pencil.

Every form is accompanied by an instruction booklet. Make sure that you go through it properly before filing out the form. Here you can find step by step guidance about the job. Moreover, each and every such instruction booklet comes with worksheets so you can make necessary calculations on them.

After you have finished the above two steps, proceed to get the tax return form mailed to the address that has been listed for your state. This you can find on the very last page of your instruction booklet. Here you must remember that the address you are mailing the form too will also essentially depend on whether you have included a check or are filing late.

When it comes to filing out or completing personal tax return forms, you have countless online options available. You may choose to go for one of these as well. IRS specially recommends filing of forms online because here the risk of errors is reduced or lowered.
For best results, you can consider using Free File on the IRS site. Here you have to ensure that you qualify first. In case you fail to qualify, but still wish to continue filing online, then choose a proper tax preparer from the option list displayed on the IRS site.

As mentioned already, filing your forms online reduces the chances of errors. Therefore, try and avail the online options as best as you can.

Author: James Alston – You can find James on Google + for more information.

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By proving your earnings   If you were to move into a new rental flat or arrange a mortgage to buy a property, it’s likely you’ll need to provide proof of your earnings. Payroll will be able to issue payslips (if you can’t find your own copies) or refer you to electronic versions to print yourself. In some cases, providing your payslips isn’t enough and payroll may even write a reference to confirm or refer to HR.

By paying your tax When you start, you’ll be asked to provide a P45 a form which details your existing tax code and the amount of tax you’ve paid on any earnings to date. This only applies if you’ve been in paid employment – even just a summer job – in the past. Otherwise, you will be asked to complete a P46 form. Either of these documents will help determine your tax code and thus the rate of tax that you have pay. This code is applied to your payroll information and the payroll team will then make the correct deductions.

By helping you pay off your student loan Many new starters are at the beginning of their professional career, fresh out of college or university. As such, many of them carry the burden of an outstanding student loan which should be paid back once earnings reach a certain level (or at your own discretion). Your payroll team might be able to set up a student loan deduction for you, so that a repayment comes straight out of your salary every month before you’ve had a chance to miss it. This is a great and convenient way to start making your repayments.

By making your pension contributions The payroll team typically handle the staff pension schemes, something that you will probably be invited to join. If you work for a large company, you’ll be included immediately, unless you purposefully opt out. You will receive an employer contribution along with any that you make yourself. If you work for a smaller company, you may need to request your inclusion and might not receive the employer’s contribution yet (rules regarding pension schemes have changed recently and are being rolled out to bigger companies first). Either way, payroll will make the necessary payments on your behalf. Payroll does far more than that and as the years pass, you might find you need them for other reasons, to facilitate parental leave, for example. They are definitely the unsung heroes of the business and people worth being on friendly terms with!

Author Bio: Paul Robinsonis a dedicated writer who has core knowledge regarding the various financial services which are provided by the organizations. Follow him on Google+.

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