How to File Taxes

How to File Taxes How to File Taxes Federal income tax in the US is collected by the Internal Revenue Service (IRS), which is a branch of the US Treasury Department. Every person living in the US needs to pay federal income tax, irrespective of his place of residence. A tax year is reckoned from January 1 to December 31 and the due date for filing tax returns is by April 15 of each year, unless extended through request. If a request for extension is not allowed, the tax return needs to be filed by August 15. However, interest would be charged on any tax due after April 15, even if an extension is obtained.

Given below is a handy guide to help you file your taxes:

First, find out your tax status to determine the tax form that will be applicable to you. Your tax status could be that of a resident alien, nonresident alien or you could be exempt for tax purposes. A resident needs to fill out Form 1040, while a nonresident is required to file Form 1040 NR. If you are exempt, Form 8843 will be applicable to you. A married individual can opt to file a joint return with his/her spouse.
Forms can be obtained from the local library, post office or downloaded from the IRS website. If you are a resident alien, you have the option of filing your tax return online at the IRS website.
Have all the important numbers for your visa, passport, and the social security number ready while filling up the form. Details in the tax form need to be filled depending on the type of income you have earned during the year. If you are a salaried individual, your employer will withhold the estimated taxes from your salary and send you the W-2 Form that shows your income for the year and the amount of tax deducted from your pay. The W-2 Form needs to be attached in original while filing your tax return.

If you belong to the self-employed category, you will require Form 1099 that shows your income. Investment income and dividends need to be reported on 1099-B, whereas for royalties and rental income received, the same Form 1099 is applicable.

Find out if you are eligible for any personal and dependent exemptions.
Determine your income adjustments, which will reduce your taxable income. Once you determine your taxable income, you need to calculate your deductions. You can either claim a standard deduction or go for itemized deductions. In case of standard deduction, a flat amount is deductible from your taxable income. It may be beneficial to opt for itemized deductions, if there are a large number of deductible items. If your tax status is that of a nonresident, you cannot claim standard deduction on your income.
Your income tax will be calculated on your taxable income minus all adjustments and deductions. Tax is determined based on the applicable slabs and rates for that year.
Verify if you are eligible for tax credits, which are available for specific expenses. Tax credits reduce the tax liability.
From your total tax liability find out if any tax is still due after deducting the taxes withheld by your employer and the estimated tax payments made by you during the year. If you still owe money, the payment needs to be done before the deadline date. In case of over payment of taxes, IRS will make a refund either through direct credit or by check.