A Complete Guide to Tax Filing

Federal income taxes are essential for every US business and workers to pay to the Internal Revenue Service (IRS), these taxes portray that you are done with your fair share and for this purpose the customers will need to file an annual tax return. You must be wondering what this annual tax return is? Well, this annual tax return determines the total income an individual or business has earned in the entire year, and how much tax they were required to pay on it and how much they have actually paid. Mostly customers tend to overpay taxes, so in such cases they will get a tax refund; similarly in cases where customers have underpaid then they will surely have to pay the amount due. Tax filing has changed during the recent years and have become quite simplified in some ways, since tax filing can be quite stressful and daunting, and we understand how precious time is for all of our customers, so for this reason we have jotted down a complete cheat sheet that will be helpful for our customers and they can then easily file their taxes both on paper or online. Read on, to find out everything you need to know about filing your taxes. 1: Basics of Tax Filing: 2: Why do we file tax returns? 3: When to file your Tax Return: 4: Who has to file a tax return? 5: Gather your Tax Forms and Documents: 6: W-2 Forms: 7: 1099 Forms: 8: 1098 Forms: 9: Important Documents: 10: Figure out your Filing Status: 11: How to actually file your tax return?

Basics of Tax Filing:

It is very important to understand the basics of a tax return and why it is needed, there are some basic terms that one must be aware of when filing their taxes. There are three basic and specific tax terms that everyone needs to know; the first one is the filing which involves Internal Revenue Service (IRS) asking the recipients to file a tax form and send submit it to them. The second basic term of tax filing is tax claim, this involves the recipients claiming for something on their tax return and qualifying to get it. The third part of the basics is known as schedules, no not the calendar one! Schedule is just another name for tax forms.

Why do we file tax returns?

Each and every worker in the US has to pay federal income taxes, one of the good things about these taxes is that the customers do not have to pay all the taxes at the same time instead the federal government has a rule for its recipients whereby it allows its recipients to annually remove a portion from their annual tax bills, and this process of removal of taxes annually from your paychecks is known as withholding.

The withholding process is done by your employers based on the W-4 form, which involves your personal details and things like how much you are expecting to earn in the upcoming year. Internal revenue service is the federal bureau in charge of income tax collection so for this reason employers are supposed to send these withheld taxes to the internal revenue service. It is solely the Internal Revenue service’s duty to track how much every business, person or organization is supposed to pay.

No matter if you are self-employed or do not have an employer that can withhold your taxes, you will still have to withhold taxes from your salary. You must be wondering how it is done? Or how much do I owe the (IRS)? Well, this is done through estimated tax payments, these are known as the quarterly payments that customers make to ensure that pay the income taxes they owe. At the end of the year each and every customer has to file a tax return whereby you confirm to the internal revenue service’s that you have paid enough taxes that were required. Married couples can opt for filing a joint return which will cover both the spouses.

When to file your Tax Return:

nternal revenue service sets the date for every year and lets the customers know when they will start accepting the returns, as of normally the tax return takes place in the last week of January. The usual tax deadline falls on the April 15th, but due to the on-going pandemic the tax date has been extended to July 15th. This time period when customers can send in their tax returns is known as the tax season.

There are times when customers request an extension in the tax return deadline, in such cases you will have to apply for a tax extension which can give you additional time until October 15th to file your tax return. This extension will only be granted by filing the right internal revenue service’s form within the given deadline. This extension only grants you some time to send-in your tax return, however the tax bill a customer owes needs to be paid by the tax day.

Who has to file a tax return?

Anyone with income in the US has to file a tax return, but some factors that determine whether you need to file or not include; your filing status, total annual income, your age and factors likes if you are dependent of someone. As per the general criteria you must file a return if your total annual income was more than the standard deduction value. You must go through the income threshold and check if you fall under it, incase if you do then you should file a tax return if you find yourself eligible for certain tax credits that are offering a refund.

Gather your Tax Forms and Documents:

In order to complete your tax return you will need certain financial information and for this reason, it is important that you gather all of your documents before filing the tax return. If you are not aware of the forms you need, do not worry USA Tax Settlement has got your back, read on to find out about the forms that you will need in order to complete your tax return.

W-2 Forms:

This W-2 form is used by your employers to report details like how much you have earned annually and how much tax they have already withheld. In case if your company has multiple employers who withheld taxes, then in such a case you will get a W-2 form from each one of them. Make sure the mail all your W-2 forms by January 31st, so you can get yours by early February.

Important Documents:

These documents include all the important details, forms, receipts and payments you made during the year, which could include your rental income, lottery winnings, incomes from an installment sale and so on. Other documents that you need to gather include taxes that you have already paid like property taxes, state or local income taxes.

Another important detail that you need to keep in mind is to gather your last year’s tax return specifically the adjusted gross amount or otherwise known as AGI. Your adjusted gross amount from last year’s tax return is used by Internal Revenue services to verify your identity. Also gather your bank account details so that any refund that is to be made can be directly deposited in your bank. If you are claiming any dependents on your return, make sure you have their dates of birth and social security numbers, and not to forget any documents detailing child support or alimony payments that you may have made or received.

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