Monday, January 13, 2014

Basics: Tax Returns

This is related to taxes. You'll see.
Read this if: 

1) You don’t know if you need to file this year. 
2) You know you need to file taxes but don’t know where to start. 

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This is the first year that I will be filing, and I am taking notes! Read on for my expert guidance. :D 

Who needs to file?

If you don’t have any kind of income or investments, you probably don’t have to file. The IRS (the people who are in charge of this whole thing) has a list of questions that help you decide if you need to file, found here or here.

What is the point of filing?

I have a job throughout the year, where I earn money. Some of that money is kept from me, because the government needs it (this is called “withholding”). The amount of money withheld from me is just an estimate - maybe more was withheld than necessary, or maybe I was given too much (aka, not enough was withheld). Either way, someone owes someone money. Either the IRS gives you a refund, or you have to give them money, and a tax return tells you how much (and to whom) money is owed.

What do I need to file?

For most people around my age (21), the form that needs to be filled out is called the 1040EZ. You can find it, fill it out, and submit it online. Instructions for the form are also found online. I recommend reading this because the 1040EZ form refers to the instructions sometimes (you may have to look up information in a table). 

You’ll need some other forms, too, most of which will be available closer to January 31. You should expect something like these forms: W-2 (tells you how much you made, what was withheld), and 1099 (form that tells you how much interest you got from bank accounts, etc. You’ll probably get one for each account you have). 

Bottom Line

There is a traditional deadline of April 15th each year, so you have plenty of time. I just like getting things out of the way, so I'm preparing now. I will be writing more about the process in the weeks to come, so I hope you like reading about taxes. :D 

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As always, contact me with questions or suggestions! You can either comment directly on the post or send me an email to moneymattersjoan@gmail.com. 

Photo Credit: JD Hancock via photopin cc

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