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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