Can you help me understand tax returns?

Question

I just got out of college so now I'm making my own money and going to have to do my taxes myself for the first time. I know I claimed myself as a dependant when I filled out my forms. Will I definetly get money back? How is it that some people owe money? What factors do I need to take into consideration? I'm lost...

As far as work goes I drive there, work all day, drive back. I don't travel or put out money for anything work related. I have school loans but I don't think that's related...

Answer 1

Firstly, you have to determine if you are a dependent of your parents. As you just got out of college, that is possible. Review the link below.

Are you paying your student loans back yet? If you are, the interest is deductible on your tax return. You will get a Form 1098 from your lender in January or early February. Yo may even be able to access it online and download it.

Some CPA's specialize in taxes and, if you feel more comfortable, you might want to take your tax paperwork to one of those. Alternatively, go to irs.gov and click on the FreeFile icon after January 12th. You should be able to file your taxes either for free or at minimal cost online. You can even have your tax refund deposited straight into your bank account. The person who mentioned Turbotax makes a fair point, but there is no point in paying for something if the government gives it to you for free!

If you claimed yourself as a dependent and as single on your W-4, then you will probably get a little bit back. However, if you are a dependent of your parents, you may owe a little. That is because, if you are a dependent, your parents get to claim your exemption, not you. That, in fact, is often what causes people to owe tax. They claim too many exemptions and then owe at the end of the year. No one who is in a regular job and with only a little investment income should have to pay more than a few dollars in tax. There are other reasons people owe tax, such as having significant investment income, running a business or selling investments.

Answer 2

We get refunds because, basically, we've loaned money to the government. The more you have taken out of your check, the more they've borrowed.

Claim 1 or zero to have the most taken out of your check if you want a refund at the end of the year. Claim more dependents on your W-4 (but not on your tax return) if you want to get the money in your paycheck throughout the year.

Either way, you get your money.

You probably won't have a lot of deductions, so could just file an EZ form. But do speak to a tax professional for advice.

Answer 3

Depends on things such as what you put on your W-9...how many hours you worked this year, etc. No guarantees of getting money back. Taxes ought to be pretty simple for you...you may want to get one of the programs (TurboTax, Tax Cut) to guide you through the process, but unless you itemize, you can probably get away without one next time, as for a lot of people, there are only four or five numbers to fill in.

Personally, I usually don't want to owe, but I don't want a large refund either. Refunds are nothing more than interest free loans to the government, and I'd rather I get the interest than them.

Answer 4

that's maximum surprising. enter YOUR information first and the comparable element will take place yet in opposite. what's taking place is that the appliance is giving all the exemptions and deductions to the 1st W-2 entered, so the in a protracted time is all taxable and has no deductions or exemptions left to prepare to it. On a joint return, the 1st $18,seven hundred isn't taxed with the aid of exemptions and conventional deduction. So the equipment is calculating tax on much less that 0.5 of the 1st W-2 entered. the better the earnings, the better the tax fee. once you have in basic terms entered between the W-2's the appliance does not be attentive to your finished earnings yet. The refund quantity ability no longer something until all information has been entered.

Answer 5

Every person, organization, company, or non-profit is subject to the income tax. "Subject to income tax" means that people and organizations must report their income and calculate their tax. Some organizations are exempt from tax. But they still have to file a return and the their tax-exempt status could be revoked if the organization fails to meet certain criteria.

You are taxed on your income - that's the long and the short of it. Income is any money you earn because you worked for it or invested for it. Income includes wages, interest, dividends, profits on your investments, pensions you receive, and so forth. Income does not include gifts. You are not taxed on gifts you receive, such as inheritances and scholarships. You must pay your taxes throughout the year which is called "pay as you go." For most people it means your income taxes are taken out of your paycheck and sent directly to the federal government. At the end of the year you have paid in a certain amount of taxes. If you paid in more than what you owe the government refunds the amount over what you owed. This is called a tax refund. If you haven't paid enough to cover what you owe then you have a balance due and you must pay this amount due by April 15th of the following year or the government will charge you interest and penalties on the amount you haven't paid in.

The US tax system is progressive which means that people who make more money have a higher tax rate and people who make less money have a lower tax rate. Your tax rate will change depending on how much money you made that year. There is a debate over whether our tax rates should be progressive or flat. Politicians who support a flat tax argue that a single tax rate for everybody will greatly simplify people's lives. Politicians who support progressive tax rates argue that it is unfair to ask a person of modest income to pay the same percentage of their income as a wealthier person. This idea of fairness is the motivation for all sorts of tax benefits. For example, you can reduce your total income if you contribute money to retirement account such as a 401(k) or IRA plan. There are many other types of tax benefits. Tax benefits are how Congress rewards people for making certain types of decisions. The goal of tax planning is to choose which tax benefits make the most sense for you. Also, the income tax system is voluntary because people are free to arrange their financial affairs in such a way to take advantage of any tax benefits. Voluntary does not mean that the tax laws don't apply to you. Voluntary means you can choose to pay less taxes by managing your finances in a way to minimize your taxes.

Have an independent accountant help you with your tax form since it's your first.

Answer 6

If you want a good refund, you should claim zero. The more people you claim, the less taxes are taken out, therefore decreasing your tax refund. Sometimes it is best to go to a professional because they have the know how of getting you the best possible refund. Do you have school expenses? Moving expenses? Uniforms? Equipment for work? All this can help you. Try going to H&R Block for help. I have been taking my taxes there for years. Plus, if not much changes next year, you can use this years taxes as a guide and do your own.

Answer 7

From what I understand, the IRS doesn't even understand tax returns!

Other than that, what Melinda_r said sounds good.