Question about Income Taxes!?

Question

I get paid monthly, and well I want to file my income taxes tomorrow. I usually use my last check, I get paid the 15th of every month, am I suppose to use the check that I'm about to receive on the 15th of this month (January)? Or is it okay if I use the check that I received last year in Decemeber?

Answer 1

Your income for 2006 is what was actually paid to you, not what you earned. Your earnings for the last part of December that are paid to you in January count as next year's income.

Your last paystub of the year will show totals that probably will agree with the W2, so you can get a good estimate. But wait until the W2 is received later this month to make sure the numbers are correct and so you can e-file your return.

Answer 2

You should wait for your W2s. If you don't, the estimated refund could be wrong and then you will have to fix it. You won't be able to e-file and it won't be saving you any time. If you get a refund anticipation loan for the estimated amount and it is wrong, you may end up paying more in the long run.

Make sure that you get the full benefit of your refund by staying far away from H & R Block or one of those other commercial places. The IRS has a program called VITA that does free tax preparation for households earning $40,000 or less. They can make sure that you get all your eligible credits, such as the Earned Income Tax Credit, the Child Tax Credit, the Dependent Care Credit, etc.

This is an absolutely FREE service. They can e-file and do direct deposit so that you can get your return back in 7-10 days. There is no need to get a refund anticipation loan, which is really nothing more than a high interest loan where you would be paying to borrow your own money. You have worked hard for your money and you should be able to keep it! To find a VITA free tax site near you, call the IRS at: 1-800-829-1040.

I work with the VITA sites in Nashville and know that it can make a huge difference for working families. www.unitedwaynashville.org/nwba.

Answer 3

It sounds like a "no" to me. Your Jan 15 check will be included in your 2007 income. Use your December 15 check if it was the last money you received for the year. It will have all of your year-to-date information on it and you can just transfer the info to your 1040.

(Taxes are "cash basis". You only report on your return what you were actually paid during the year.)

However, your W-2 will be only a few weeks away, and you don't get any advantages by filing early. The IRS will still hold up your refund until THEY get your W-2 from your employer.

Answer 4

If you are asking about "paying" your taxes, then which check does not matter. If you are asking about completing your taxes, then you should wait to receive your W-2, which is sent out at the end of January (a copy is also sent to the IRS). Very often, the numbers on the W-2 differ from those on your pay stub due to items such as benefits you receive that are taxable (life insurance etc) or benefits you pay for that are not (medical, pensions, etc).
If the numbers on the return are different from the W-2, you WILL get a notice from the IRS, delaying any refund you are due, or possibly triggering an audit.
Not really worth the hassle...wait and make sure its right.

Answer 5

Neither, you should use your w-2. Many times your check will not list everything the way you need it to be for reporting purposes. Besides, the IRS will not let you file your taxes until after Jan 12. So the best thing you can do is use your w-2 to report all the income & tax amounts correctly, plus any added deduction, such as union dues or other items that are necessary for tax purposes.

Answer 6

you would use you december check as that is the monies recieved in 2006 -

does your check stub keep a running total?
The January check should have reset and the monthly and year to date totals should be the same.

Want to quit paying income taxes = support the Fair Tax Act!
It's a bill before Congress!

Answer 7

you have to use the last check that you recieved in the year 2006, if part of your pay period is on the 15th for the 2006 then I would suggest you wait on that one.