Presentation on theme: "Filing the Income Tax. Taxman Taxman by The Beatles Taxman by The Beatles Album: Revolver Released: 1966 Taxman This is a bitter song about how much."— Presentation transcript:
Filing the Income Tax
Taxman Taxman by The Beatles Taxman by The Beatles Album: Revolver Released: 1966 Taxman This is a bitter song about how much money The Beatles were paying in taxes. For every $20 earned, $19 went to the government and Capitol Records. People with high earnings pay exorbitant taxes in England, and as a result, The Beatles - as well as The Who and The Rolling Stones - spent a lot of time in America and other parts of Europe as "tax exiles." George Harrison is quoted as saying, "Taxman was when I first realized that even though we had started earning money, we were actually giving most of it away in taxes."
TAXMAN BY THE BEATLES - Lyrics Let me tell you how it will be There's one for you, nineteen for me 'Cause I'm the taxman, yeah, I'm the taxman Should five per cent appear too small Be thankful I don't take it all 'Cause I'm the taxman, yeah I'm the taxman If you drive a car, I'll tax the street If you try to sit, I'll tax your seat If you get too cold I'll tax the heat If you take a walk, I'll tax your feet Taxman! 'Cause I'm the taxman, yeah I'm the taxman Don't ask me what I want it for (Ah, Mr. Wilson) If you don't want to pay some more (Ah, Mr. Heath) 'Cause I'm the taxman, yeah, I'm the taxman Now my advice for those who die Declare the pennies on your eyes 'Cause I'm the taxman, yeah, I'm the taxman And you're working for no one but me Taxman!
Review: Why do we pay taxes?
Purposes of Taxation TAX: a required payment to a local, state, or national government. 1.Fund public goods and services. 2.Influence behavior. (cigarette. alcohol) 3.Stabilize the economy. 4.Redistribute income. Taxes in US History
Review: What are some examples of taxes?
Kinds of Taxes Income tax: income that you earn is subject to tax. Social Security tax: nation’s retirement program; approximately 6% of gross income. Medicare tax: nation’s health care program for elderly and disabled; 1.45% of gross income.
Kinds of Taxes Sales tax: tax paid on the value of goods and services. (revenue for state govt.) Excise taxes: included in the price paid by consumers. Fuel = Environmental Alcohol & Cigarettes = Health/Safety
Who Collects Federal Taxes?
Internal Revenue Service Internal Revenue Service (IRS) – Collects federal taxes, issues regulations, and enforces tax laws written by the United States Congress
How does the IRS collect most of your income taxes?
Income Taxes Your employer will withhold, or take out, income tax from every paycheck and send the money to the government.
How Much is Withheld? Depends on: How much you earn Information you provide on Form W-4 determines how much is withhold Personal Information Exempt status Allowances: factors that affect the amount of income tax withholding.
Do I have to file a return? Do I have to file a return? You are required to file a federal income tax return if: Your income is above a certain amount. You are a citizen or a resident of the United States. You are a U.S. citizen who resides in Puerto Rico. The amount of your income tax return is based on your filing status and other factors, such as your age.
Tax Time is Here! Must be filed by April 15 th
What Do I Need? What Do I Need? (Collecting Forms…) What Do I Need? Form W-2: Employer will send Form 1099-INT: Bank will send Personal records W-2 shows your total earnings for the year and the total amount of taxes withheld. Make sure all your information is correct when you get this INT: shows the earned interest on savings during the year. Other 1099 forms are used for reporting earnings on investments.
What will I be asked? 1.Status: Single Married Allowances… 2.Income Includes interest earned
How can I reduce my taxes to be paid? What things can you “write off of” you taxes?
Deductions: subtracted from income Charitable Contributions Education Casualty, Disaster, and Theft Losses Business use of home Business use of car Employee business expenses Standard vs. Itemized
Tax credits Subtracted directly from the amount of tax owed. Ex: Energy Star Appliances, Insulation, Roof, Water Heater Taxable income is different from your gross income because it is the amount after certain deductions. Final calculations: if you have overpaid in taxes for the year, you’ll get a refund, if you’ve underpaid,you must send the remaining tax to the IRS with your return.
Options for Filing Income TAX Turbo Tax Tax Prep Service H&R Block H&R Block H&R Block Liberty Tax Service Liberty Tax Service Liberty Tax Service Accountant Paper Forms: 1040EZ 1040 1040 A (LONG)
Do you have a simple tax return? You do if you: Have a filing status of Single or Married Filing Jointly Have no dependents/children Claim the standard deduction Have no mortgage payment Have taxable income of less than $100,000 You can use the 1040 EZ!
Final result Either you, or your tax preparer, will determine whether you overpaid or underpaid your federal (and state) income taxes. What is the result if you overpaid? What about if you underpaid? How again could you overpay or underpay?