In case, you are a salaried person, the taxes are deducted automatically and paid to government. In case, you are making income through profession or business, it is time for you to then pay for the income taxes four times every year or on a quarterly basis.
But, when the time comes to file for US Income Tax for us Citizens Living Abroad, it will not happen automatically nor as frequent as any of the tax payment you have come across previously. It is primarily once in a year activity for all the taxpayers unless they end up committing any form of mistake in this procedure.
1. Failing to Just Head For The IT Return
Never think that the responsibilities from your side are going to end once the tax dues are properly cleared. In case, the income exceeds a certain market for the financial year, then you better end up filing IT return. Always be sure that this income is likely to be calculated before just accounting for any of the deductions. It is one of the common mistakes.
2. Filing up Physical Returns Where E-Filing is Necessary
Government provides you with the option how to file income tax return online or physically. In case, the accessible income exceeds a mark, you have to file the tax return through e-file. Failing to do so can prove to be one mistake that can cost you a lot later.
3. Failing to Study the Forms
Your current tax credit statement provides you details of the taxes that you have paid. You should always check out that before you even file for the tax return. It might help in eliminating errors in tax calculation for filing accurate return.
4. Incorrect Forms of Personal Details
Just imagine what might happen if the refund gets credited to a bank account which isn’t yours. Here, the cheque might get delivered to wrong address. offering any incorrect personal details can create multiple issues. So, make sure to avoid such silly mistakes.
5. Exclusion of the FD Interest From Income
Interest income from savings account is exempted to a certain amount, but that is not the case with FD income interest. Half knowledge is always a dangerous point as it becomes evident that some might exclude FD interest from taxable income.
6. Never Under-Report any Income
Hiding the amount of money you are making is a crime and should never be done. If ever caught, which you will eventually, it can end up in paying heavy penalties and land in jail. So, make sure to avoid that.
7. Failing to Report any of The Exempt Income
There are multiple incomes as exempt from taxes. In case, you have dividend income from stocks then you can save good amount from tax net by just notifying tax department about that beforehand.
Always be sure to get these points covered before getting along with the notes even better.
Read More : 7 Important Tax Tips for Residents and Non-Residents Aliens
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