Tax Return

Answer 1

Everyone who has any type of income needs to keep one important date in mind- April 15. This is the date that your tax return needs to be filed. Your tax return is something that is basically a piece of paper that lists everything you have deducted the entire year. It lists how many dependants you are claiming such as children or spouses, and your total income that you have during the year. You will need to do a tax return for any amount of money that you make for the entire year. However, some states do not require you to file unless you make a certain amount.

When you get a new job you will fill out multiple papers that make you list your name, address, social security number, and the dependants that you have. All of this information will be entered into the IRS computer system. This way they can keep track of how much you make. At the end of the year you will receive a W-2 form that list your yearly earnings as well as how much money you have had deducted for federal and state taxes. You will need to take this information to a tax preparer in order to have your tax return prepared. If the preparer discovers that you have paid too much money during the year, you will receive a refund. If you have not paid enough, then you will have to pay money.

There are ways to make money with a tax return. During the year you when you are earning money at work, you are also paying taxes on the people who you filed as dependants. At the end of the year, you can claim those dependants and receive a deduction for them. The more dependants you claim, the higher the deduction you will receive. Normally you can only claim two to three children on your tax return to be eligible for earned income credits and maximum tax deductions. You can also count charitable donations on your tax return. Keep all receipts from everything that you donate so you can turn them in on your return. If you don't have proof of how much you make and how much you have spent on donations or expenses, then you cannot claim it. Other expenses you can count on your tax return include school expenses if you are in college and childcare expenses. Self-employment can be considered as income as long as you keep a documentation of how much you make.