All about Personal Accounting

All of us having a bank account need to check and reconcile entries in the statement against our chequebook periodically. Some of us do it online on a more frequent basis and can even do it daily to ensure that we are in total control and have up to date status of our account. Typically some entries like insufficient balance, ATM charges, transaction charges etc do not reflect on our chequebook. These entries need to be reconciled with the bank statement to reflect the correct status of our account.

On the other hand, some credit entries like refunds, interest credits or other deposits is something you would like to note down for use later on while filing the tax returns.

This reconciliation process done regularly would throw up any anomalies on either side and can be rectified on time.

The annual filing of personal income tax is another activity that most of us do not look forward to. While there could be many reasons, some of them are procedure related, lack of awareness, and improper preparation in terms of having the right information at the time of filing the return. It is for this reason that some engage the services of a professional, while others prefer to file it themselves.

The majority of forms include:

Income:
Money earned from salary or assets after allowing for exemptions if any. This is the base amount on which depending on the tax bracket you fall under, taxes are levied.

Personal Exemptions:
Some amount in the income that is not computed for tax and is deducted from your taxable amount.

Standard Deduction:
Income tax rules allow for some deductions on expenditure incurred on charity, real estate levies, house loan payments.

Taxable Income:
This is the income taxable after all exemptions and deductions.