FEDERAL INCOME TAXES Just the basics…... Filing status Single Married – joint filing Married –...

FEDERAL INCOME FEDERAL INCOME TAXESTAXES

Just the basics…..

Filing statusFiling status

SingleMarried – joint filingMarried – separate filingHead of household – meet conditions, can

be single or marriedWidow(er)

ExemptionExemption

The amount you subtract for each person who depends on you for income

Reduces your taxable income and taxInclude self and dependents

GROSS INCOMEGROSS INCOME

All taxable income receivedEarned income (salary, wages, tips)Unearned income (interest, dividends,

unemployment….)

On your W-2 – wages, salary, tipsOr1099 – interest, dividends, unemployment

W-2W-2

10991099

ADJUSTED GROSS INCOMEADJUSTED GROSS INCOME

Income subject to taxesGross income – some spending

◦IRA’s, student loan interest, …..

DEDUCTIONSDEDUCTIONS

Either..Itemized deductions (medical, dental,

property tax, mortgage interest, donations…)

OrStandard deduction (if you don’t have

itemized deductions)

TAX CREDITSTAX CREDITS

Subtracted from the tax owed – educational expenses, child care expenses…

VERY SIMPLY….VERY SIMPLY….

GROSS INCOME- ADJUSTMENTS= ADJUSTED GROSS INCOME- STANDARD DEDUCTION OR ITEMIZED- EXEMPTIONS= TAXABLE INCOMEGet tax from tax tables- CREDITS-TAX WITHHELD (on W-2)= TAX OWED OR REFUNDED

Who files?Who files?

All who earned enough to owe taxes!If you don’t owe taxes but had deductions

you should file to get all back!

WHEN DO YOU FILE?WHEN DO YOU FILE?

The DREADED April 15!

FORMSFORMS

Use if you have more deductions than the standard deduction (set by IRS, changes every year)

10401040A

If not enough deductions use the 1040EZ