Presentation on theme: "16th Amendment to US Constitution The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment."— Presentation transcript:
16th Amendment to US Constitution The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several states, and without regard to any census or enumeration.
Citizens ◦ pay income taxes based on the $ earned ◦ take deductions based on $ spent on deductible items (according to tax laws) ◦ Complete the tax return form Taxpayers are legally responsible for ◦ Accurate record keeping ◦ Filing a tax return on time ◦ Paying any additional tax due
Record of Earnings ◦ W-2 (from employer) ◦ 1099 ◦ Interest Earned ◦ Dividends Earned ◦ Business Profits Deductions for Expenses ◦ Dependents ◦ Interest paid ◦ Taxes paid State, federal (IRS), property ◦ Dependent care ◦ Medical Expenses
Individual ◦ 1040 EZ ◦ 1040 ◦ Business Schedules Business ◦ 1120
Download forms from the IRS USPS has paper forms Paid tax preparers provide forms ◦ Liberty Tax ◦ H&R Block ◦ Local individuals Can I complete return myself? YES ◦ IRS website has tutorials ◦ Software available Turbo Tax H & R Block
Federal Tax Return NC Tax Return April 15 th following end of calendar year (December 31)
Federal Return Internal Revenue Service (IRS) State of NC Return NC Department of Revenue ◦ Raleigh, NC Not all states have state income tax ◦ Ex: Florida
Who issues Refunds? Federal ◦ The US Treasury Department State ◦ NC Department of Revenue ◦ Other state tax offices Do I get a refund? ◦ Deductions from paychecks for income taxes are estimates & paid into your IRS account ◦ Actual $ owed is calculated at end of year based on deductions ◦ IF your tax due is MORE than you paid in during year, you OWE the IRS. ◦ IF your tax due is LESS than you paid in during year, the IRS OWES you.
Not paying the taxes that are due to the government Lying about amount Not filing return at all What if I do not file a tax return? Subject to state & federal laws ◦ Fines ◦ Interest charges on money due ◦ Imprisonment
Tax returns are subject to audit May be charged with tax evasion