Employment and Taxes
Dependency
Being someone's dependent means they help pay for your needs throughout most of the year. Someone who claims to be as a dependent may have their taxes educed if they follow the rules.
Deductions vs Credits
Deductions and credits can reduce the amount of taxes you owe but in different ways. A $100 deduction would reduce taxes by a percentage based on your tax bracket. So if you were in the 25% tax bracket, you would have $25 subtracted from your tax bill. But a $100 credit reduces a tax bill dollar-for-dollar, which means subtracting $100 from the tax bill.
How can you get your refund?
Direct deposit the entire refund into your savings account, get your refund deposited into up to 3 bank accounts or have up to 3 savings bonds mailed to you, or get mailed a paper check
Does each state have the same tax laws?
Each state has different tax laws that impact how you file your return.
How much times do you need to file your taxes?
Each year, you must file your federal taxes and state taxes if your state requires it.
Standard Deduction
Everyone can claim the Standard Deduction which the IRS calculates based mainly on your age and filing status.
Benefits in Comparing Jobs
How much you're paid is usually an important consideration when comparing jobs, but it isn't the only thing you should look at. Employers can offer benefits in addition to your pay. Benefits can help protect you financially and make your work experience more enjoyable. Let's compare the pay and job benefits between your current job and new job offer. Compare
Final Verification (Last Year's Tax Returns)
If you filed taxes last year, you will be asked to share your Adjusted Gross Income (AGI) from that return. If you didn't file taxes last year, you can select that you didn't file or put your past year's AGI as $0. The IRS recommends that you keep your tax returns for at least three years. You should keep past returns where you can find them easily.
Income that you don't need to report
Not all income needs to be reported. Certain disability income, child support, and allowances don't. You will be asked questions to determine if your income needs to be reported.
How many people can claim you as dependent?
One person
Preparing taxes online
Online tax preparation software may not only help you complete a 1040 form, but it may also help you send it to the IRS electronically.
Filing for With Dependent Status
Supporting a dependent, such as a child or a disabled or older relative, can cost a lot of money. Having a filing status such as Head of Household or Widow(er) with a Dependent Child allows you to claim deductions and credits that may reduce the amount of taxes you need to pay.
How can Tax Preparation Software help you?
Tax preparation software can help prepare and file your taxes by posing questions to collect necessary information.
Preparing taxes through paper
The least common way to prepare taxes is to fill out a paper 1040 form and mail it to the IRS. Even though this is still an option, it does have a higher risk of errors, and the IRS prefers taxes be filed electronically.
Who can claim you as a dependent?
The person who supports you must be a relative (parent, grandparent, uncle, aunt, cousin), foster parent, or adoptive parent who is a U.S. Citizen, U.S. national, or resident of the U.S., Canada, or Mexico.
Why is it important that the numbers are accurate?
The routing number indicates which financial institution the deposit should go to, and the account number of his savings account makes sure that it gets to you
Preparing taxes through tax expert
There are tax professionals who can help you prepare your taxes and file them electronically. Consider using a tax expert if you have complicated tax situations that may include different income sources, investment earnings, or lesser known deductions.
True or False: One can't claim the Standard Deduction and itemized deductions at the same time.
True, you would need to make a choice. Choose the one with the highest amount to get that amount in deductions
W-4 form
Used to inform your employer of how much federal income tax to withhold from your paychecks.
Filing for Martial Status
While married, you can decide to file jointly or separately with your spouse. Filing jointly is almost always better than separately since it usually reduces the amount of taxes you need to pay even if only one person is working
Types of income that can be reported when preparing taxes
Work related income, investment related income, business related income
Claiming a Credit/Deduction
You can only claim a credit or deduction for something he has proof of doing, one can have receipts from donating money or other proof.
Final Verification (State-Issued ID)
You may be asked to share your driver's license or a state-issued identification number. This may help prevent tax fraud and also help process your return faster.
Final Verification (Consent to e-file)
You will need to give permission to allow TurboTax to submit your returns electronically.
Final Verification (Create a Signature ID)
You'll be asked to create a five digit signature ID that you will need to use to check on the status of your return. Keep this number in a safe place that you'll remember.
You pay too much in taxes
You'll get a refund
You pay too little in taxes
You'll owe the IRS money
W-2 form
a form that your employer sends you that tells you how much you've earned and how much you've paid in taxes in the last year
What does your Medicare and Social Security taxes pay for?
for health care and living costs for citizens who are retired or disabled
Where are taxes taken from?
from your gross pay
Credits
items that reduce the actual amount of taxes you need to pay. If it's a refundable credit, you can add the credit to your refund. If Carlos owed $400 in taxes but had a refundable tax credit of $500, he would get a $100 refund.
Deductions
items that reduce the amount of income that can be taxed. Since Carlos made $9,440.08, a deduction of $400 would mean his taxes would be based on his income of $9,040.08. His income did not reduce, but the amount the government can actually tax did.
Ways to prepare your taxes
paper, online, tax expert
What do taxes pay for?
roads, first responders, public schools