How to File Your Taxes

Posted on February 19th, 2009 by Marck

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It is the duty of every American citizen to pay taxes. You may not necessarily agree with how your tax money is spent, but you are still obliged and required to pay your honest share of running the country to Uncle Sam. Taxes may seem confusing to file, and may invoke images of calculators, adding machines, and cold accountants who worry more about how much you’re paying them than how much you owe the Internal Revenue Service. Filing your own tax returns doesn’t have to be complicated, provided you follow these tips:

When to File Taxes

Taxes are required of every American citizen. Taxes help run the government, and provide for social services like health care, national defense, education, and other important parts of a free society. You need to check state and Federal laws first to see if you’re qualified for some filing statuses, or if you’re not required to pay taxes; you can opt not to pay taxes if and only if you’re unable to afford to pay them. Remember that tax evasion is a serious crime, and you may end up paying more for it than if you filed and paid your taxes on time.

Calculating Taxes

The hardest part of tax season is to determine how much you owe the IRS in taxes. It helps to hire an accountant specializing in taxation to make things easier, but you should always keep some important numbers when you calculate your taxes:

Taxable income refers to your gross earnings and money received for the entire tax year, minus deductions and exemptions. Always refer to the Internal Revenue Code (IRC) when calculating your taxable income.

filing taxes

Itemized and standard deductions. When calculating and listing deductions, you can choose between itemized and standard deductions. Deductions are determined after you have calculated your annual gross income (AGI). For itemized deductions, you should list down all possible deductions allowed by law. Standard deductions are a fixed amount that you pay in place of item-by-item deductions you file in your tax return. You can also get deductions based on age, physical disabilities, and if you have dependents.
Income tax is the difference you get when you subtract exemptions, deductions, and other adjustments from your taxable income. Some companies may automate this process through withholding taxes, or money subtracted from your gross income every payday.
Additional taxes. You may need to hang on to some of your receipts to check if you can still reduce your total taxes. Always refer to a taxation reference book to see what purchases and items can be deducted from your total taxes.

Paying Taxes

The hard work is over once you’ve crunched the numbers and came to an honest statement of your taxes, income, and expenditures. Paying and filing your tax returns are very easy:

Tax forms. Forms can be secured from the Internal Revenue Service. Simply fill in the form completely, and submit the forms to the IRS as early and as promptly as you can.
Online tax forms. The Department of Treasury offers online filing services for federal taxes. You can still use the Internet to calculate your tax returns and estimates using free software and online tax calculators.

Every dollar you pay in taxes goes a long way for the government to serve you and your community. With these tips to help you file taxes, it’s your duty to file your taxes early and to account for every cent you owe the government in taxes.