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I'm 18 and Don't Know What Filing Taxes Means?

 
 
Reply Thu 22 Nov, 2018 05:08 pm
I want to say ahead of time thank you for reading and answering this:
Okay so I'm 18 and I am getting my first job soon. (I spent my HS years being a caretaker and babysitting from time to time.)
I was never taught in school what "filing taxes" means and I have no idea what that is. I was hoping someone on here could tell me. I honestly don't even know where to begin...
Why do we "file income tax"- why do we have to tell the IRS our income if we already pay a percentage of our paychecks towards social security, medicare, etc.? I hear people say they get money from the IRS or that they have to give the IRS money- what is that all about? I thought everyone gives a set percentage of money to the government with every paycheck? And why do we get deductions for random reasons? In terms of filing taxes, is it better to be married or single and why? When should a person start worrying about filing taxes? How evil is the IRS if you accidentally make a mistake when filing? What does "filing" even mean??

What is all this witchcraft?!
 
View best answer, chosen by blackbear
maxdancona
 
  2  
Reply Thu 22 Nov, 2018 05:53 pm
@blackbear,
First, the practical. Filing taxes is pretty easy these days. You pay $20 for software (there are several online). Then you answer questions on your computer and the computer figures out your taxes for you. If you are single and don't own property it os pretty easy.

Second, the reason you have to fill out the form is that the government gives out all sorts of tax breaks. Most of the time the government takes too much out of your paycheck. After you fill out your form you will likely get money back.

Third, the question about being single is a little complicated because there are other things that matter like differences in salary, ownership of property and whether you have business income.

After I got divorced, my taxes went up several thousand dollars, but my wife's income was much lower than mine.
0 Replies
 
Ponderer
  Selected Answer
 
  3  
Reply Thu 22 Nov, 2018 05:59 pm
@blackbear,
You are right about everyone giving a percentage of your paycheck to the government. You are ahead knowing that, so you won't have as much of a "Whaaaa?" experience when you get your first check. When you get the job, you will fill out a form so that the government "has your number".
(Social Security number) The information on that form gives the employer an estimation of how much to withhold from your check. Dependants are people that you are responsible for. If you had three children, they would withhold less for taxes. At the end of the year, your employer will send you a form (W2) that shows your total earnings for the year. Then you have until April to "worry about" filing taxes. That just means that
you fill out an income tax form (which is easy)
enclose the W2 form, and send it to Uncle Washington. Then I guess they put it in a big file cabinet. If the employer has withheld more than you owe, you will get a refund. If he hasn't withheld enough, you will owe tax.
0 Replies
 
oralloy
 
  2  
Reply Thu 22 Nov, 2018 06:02 pm
The contributions that are withheld from your paycheck are not the official amount that you owe. Your official bill is determined by your yearly filing.

Depending on the results of your yearly filing, you may owe more than you've already paid over the year. Or you may owe less and get a refund from the government.

Deductions are not for random reasons. Some politician somewhere wanted to encourage a given behavior, so the law was written to give people financial encouragement to engage in that behavior.

In general if you have a partner you'll get a benefit for filing married, but there may be exceptions. The reason is because marriage is one of those behaviors that politicians decided to encourage.

If you make an honest mistake on your taxes, they will insist that you pay up (presuming that you owe more), but there generally will not be any criminal penalties. If they have reason to think you tried to deliberately defraud them, they will pursue criminal charges.

The best thing you can do is have your taxes filed by a professional tax preparer. You'll have to pay them a fee of course. But they will know to claim deductions that you may not realize that you qualify for, and they will avoid making catastrophic mistakes that you might make on your own.
maxdancona
 
  2  
Reply Thu 22 Nov, 2018 06:51 pm
@oralloy,
An 18 year old single person with no complications (I.e. real estate or business transactions) doesn't need to waste money for a professional. Just pay for on of the online services.... The software is pretty easy and does all the calculations for you. All you need are your W-2s and healthcare forms. You generally get these from your employer.

I go through mine (federal and state) in well under an hour. I use taxact online, there are several others.
0 Replies
 
neptuneblue
 
  1  
Reply Thu 22 Nov, 2018 09:16 pm
@blackbear,
We file income tax because everybody shares in the liability to pay for government services such as building/repairing roads, building and maintaining schools & libraries, funding police and fire departments, funding public parks and rec services, and many other services.

When you get a job, the company will ask you to fill out some paperwork to help determine how much tax you will owe. The form W-4 will ask you if you're married or single and if you want to claim any children as deductions. Most single people choose one (1) exemption for themselves.

Once that happens, taxes for federal, state, local and Social Security will be taken automatically out of your check and your employer will forward that money to the appropriate government accounts, so there's no need for you to worry about that.

The deadline for filing your taxes in April 15th for the proceeding calendar year January through December. Your employer will give you a form called a W-2 the next January that shows how much you made and how much taxes were taken out for the time that you worked there. You'll need this form to file your taxes.

The forms to file your taxes are the 1040 EZ and 1040A. EZ is exactly that, the easiest form to use when you don't have dependents such as a spouse or kids. You can go to IRS.gov to either download the form or use their PDF to file directly with them. There are online services available to purchase but they also require additional fees to file electronically for you. Professional tax services do the same thing, and require additional fees to use their services.

In your case, your local library should start carrying tax forms in February free of charge. Doing your own taxes at this point in your life is easy - you plunk in amounts in the boxes they tell you to and work down the page. There's simple addition and subtraction involved plus looking up your tax liability in a table/graph. Depending how much you made and how much taxes were taken out of your check will determine whether you've paid enough in to cover your tax liability or have to owe. If you paid in too much, you'll get a refund of the over payment. If not, you'll have to send in an amount to equal the amount of your fair share of taxes.

You'll do this process once for the Federal level, once for the State level and once for a local taxes if that's collected in your area. That's why you get four W-2 forms, one for each filing plus an additional one for your records. Always print out or make a copy of your tax return and keep it in a safe place.

Don't worry about making a mistake, these forms are virtually foolproof. Unless you intentionally try to de-fraud the government, you will be fine. Double and triple check your work before sending it out.

Although snail mail takes about 6-10 weeks to get a refund back, I wouldn't spend any thing extra to file electronically. If you're not sure you did something correctly, there's lots of free tax advisers either at school, library, parents, employer or other trusted adult that can help you.

0 Replies
 
sakshirathor12
 
  -3  
Reply Tue 27 Nov, 2018 02:12 am
@blackbear,
consult an accountant rather than a less knowledgeable person...
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