Taxes

By federal law, the U.S. government is entitled to a percentage of your annual pay. Taxes are taken from each paycheck. Filing taxes allows you to see if you have overpaid or underpaid your taxes for the year and if you owe money or are entitled to a refund. Taxes must be filed by April 15.

If you owe money, it must be paid by April 15; however, there are extension forms available. Failing to file and pay taxes will result in hefty fines and possibly jail time. The amount taken out each paycheck is determined based on the tax documents you submit to your employer.

Tax Forms

For any job you take, you will be asked to complete a W-4 Form, as well as other tax documents. These forms and the terminology can be confusing. What you mark on these forms dictates what portion of your pay will be deducted from each paycheck for taxes.

W-4 Form (Employee’s Withholding Allowance Certificate)

This form is issued by the Department of Treasury and the Internal Revenue Service for federal income taxes. By federal law, you are required to fill out this form so that the correct amount of income tax can be withheld from your pay. Withholdings are determined by your marital status, amount of allowances claimed, and if you want additional funds withheld.

State Withholding Form

Depending upon which state you live in, you will fill out a form so that the correct amount of state taxes will be withheld from your pay. The correct amount to be withheld will be determined by your marital status, age, and number of dependents claimed.

Filing Taxes – Step by Step

Gather your W-2s (wage and tax statements)

Your employer will issue you a W-2 sometime between January 1 and February 15. This document reflects the amount of money you have earned in the previous calendar year. You need to report income for every job you have worked during the year on one 1040 form.

Select your tax form

Select and print out the Individual Income Tax Return Form you will be using (1040, 1040A, or 1040EZ). If you’re single, don’t own a home, and are without dependents, you may qualify to use the 1040EZ form for filing your taxes.

Follow the instructions

Filling out these forms can be very tricky. There are several online websites that can help you fill out your taxes. Check that a website is reputable before inputting your tax information.

And don’t forget to get a second look. Some popular tax-preparation companies will hold free forums to review your tax document. Take advantage of these opportunities. Don’t be afraid to ask questions and meet with an accountant.