Right after university, you enter a competitive world trying to balance between work, family and pressures of maintaining a social life. You barely know about any of the aspects which lie ahead of you. Taxes are one such aspect where you do not know anything, you venture out and there is little room for error because of the grave consequences that lie ahead. Adulting can be scary. In such a situation, when you are a fresher into this world, you can’t afford high fees of accountants.
All you need is a guide, someone who can miraculously guide you through these troubled waters.
Here is a step by step guide for all you need to know as of now.
The federal government uses taxes to pay its bills and provide public goods and services. The Internal Revenue Service (IRS) collects the taxes you owe through withholding from your paycheck, estimated tax payments, and when you file your taxes each year.
Do I Need to File?
You may not have to file a federal income tax return if your income is below a certain amount. However, you must file a tax return to claim a refundable tax credit or a refund on income tax withheld.Find out if you have to file a tax return.
Follow These Steps to File a Tax Return
Note: The new tax law has changed the forms, credits, and deductions you may have used in the past.Learn the basics of the tax law changes.
Gather your paperwork, including
A W-2 formfrom each employer
Other earning and interest statements (1099 and 1099-INT forms)
Proof of health insurance coverage
Receipts for charitable donations, medical, and business expenses
Choose your filing status– Whether you’re married and the percentage you pay for household expenses determine your filing status.
See if you qualify for free tax return preparation– The IRS offers free tax help to people with a low income, military service members and their families, people with disabilities, seniors, and taxpayers with limited English.
Decide how you want to file your taxes – The IRS recommends using tax preparation software for easiest and most accurate returns. You can use free or paid programs to calculate and file your taxes online or get paper forms to mail to the IRS. You can also hire a tax preparer to do your taxes for you.
Calculate your taxes, credits, and deductions– Tax law changes may impact your credits and deductions and the taxes you owe.
Add up your sources of income, including salary, interest and investment earnings, and pension or retirement accounts.
Check if you are eligible for education, family, and dependent creditsfor a qualifying child or relative.
You may also qualify for deductions for things like mortgage interest or charitable donations. Credits and deductions can lower the amount of your taxable income. But keep in mind, while the IRS has increased the standard deduction for tax year 2018, it eliminated some other types of deductions.
If you owe money, earn how to make a tax payment, including applying for a payment plan.
File your taxes by April 15, 2019 (April 17 in Maine and Massachusetts).
Do I Need to Pay Quarterly Estimated Taxes?
If you’re self-employed, not enough tax is taken out of your salary or pension, or you have other earnings such as alimony, interest, or dividends, you may need to pay quarterly estimated taxes. Learn how to calculate your estimated taxes, when they’re due, and the penalty for underpaying.
Tax Filing Deadlines
The Internal Revenue Service (IRS) began accepting and processing federal tax returns for tax year 2018 on January 28, 2019. The deadline to file federal taxes for most taxpayers is April 15, 2019, unless you file for an extension .If you live in Maine or Massachusetts, you have until April 17, 2019, to complete your return.
Federal and state taxes usually have the same filing deadlines. Find out the tax filing due dates in your state. If you do not file and pay your taxes on time, you will be charged interest and a late payment penalty. For taxpayers due a refund, there is no penalty for filing a late return.
Tax Filing and Payment Help
Learn how to file a federal income tax return.
File online or find the address for mailing your paper return. To find out how to mail your tax return, get tips and information from the U.S. Postal Service (USPS).
Explore free online tools from the IRS and special programs for qualifying taxpayers .
Learn about your payment options if you owe money. If the IRS owes you money, you can choose to receive your tax refund by direct deposit, U.S. Series I Savings Bonds, or paper check.
Extension to File Your Tax Return
If you are unable to file your federal income tax return by the due date, you may be able to get an extension from the Internal Revenue Service (IRS). This does not grant you more time to pay your taxes.
You may be able to get an automatic six-month extension to file your return. To do so, you must file IRS Form 4868, Application for Automatic Extension of Time To File U.S. Individual Income Tax Return (PDF, Download Adobe Reader) by the due date for filing your calendar year return (usually April 15) or fiscal year return. For a Spanish version of this form, download IRS Form 4868sp (PDF, Download Adobe Reader).
Special rules may apply if you are:
Living outside the United States
Out of the country when your six-month extension expires
Living in a combat zone or a qualified hazardous area
Get tax filing information , including guidelines on extensions of time to file.
Get Your W-2 Before Tax Time
The Wage and Tax Statement, known as a W-2 form, is an important document to have at tax time. This form shows the income you earned for the year and the taxes withheld from those earnings. If you have had several jobs over the year, you may have several W-2 forms to file your tax return. Employers must send you your W-2 by January 31 for the earnings from the previous calendar year of work.