In publication 17 you will find a lot of useful information
regarding preparing and filing electronic returns. You are required to figure
out your taxable income during the tax year and you must also account for all
your income and expenses that must clearly show your taxable income. In general
terms a ‘tax year’ is an accounting period with the duration of a year and most
tax returns for individual citizens cover a calendar year that is from January
one through 31st of December. You can also choose your tax year or accounting
period when filing your first IT return but it can never be longer than
duration of 12 months. You can always refer to Publication 538 for more
information about accounting periods or accounting methods.
Your accounting method is actually the way you account for
all your income and expenses. Either an accrual method or cash method is used
by most taxpayers or you are required to choose your method at the time of
filing your first return. The method can always be changed afterwards with an
approval from the Internal Revenue Services. The cash method is used by most
individual taxpayers and in this method you are required to report all items of
your income in a year that you have constructively or actually received.
If it is not possible for you to pay the full due amount
with your return then you can always ask for monthly installments and you can
use form 9465 to apply online for installment payment facilities. But you will
be charged with interest and may even require paying a late payment penalty and
if your request is granted you are also required to pay a fee.
No comments:
Post a Comment