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Unformatted text preview: en numerous tests in
high school that are much harder
than filing your tax return. How should you proceed? New
software programs are available for
you to use, or you can complete your
tax returns yourself. Even if you use
the software, make sure you understand the process behind filing your
return. An Overview
Let’s look at the big picture of
what you will be doing. First, you
will identify all the income you
earned in a given year. Let’s say
this amount is $50,000. Second,
you subtract certain dollar items
from this $50,000. These items
come with different names:
exemptions, deductions, adjustments. Third, you end up with a
certain dollar amount of taxable
income. Let’s say this amount is
$40,000. Fourth, you simply consult an IRS tax table to see how
much you will pay in taxes based
on this taxable income.
These simple steps are really all
there is to it. It is a matter of a little
addition and subtraction and consulting one (fairly simple) tax table. The Step-by-Step Process
Now let’s outline the steps in a
little more detail.
1. Gather together all your tax
documents. They include
things such as your W2 statement (a statement you receive
from your employer stating
how much you earned during
the year). 374 Chapter 14 Taxing and Spending 2. Most likely, the first several years
you will be able to use Form
1040EZ, which is the simplest
form. For example, you can use
this form if you earned less than
$100,000 during the year, do not
plan to claim any dependents
(anyone who is dependent upon
you for some support), and have
interest income of $1,500 or less.
If you are unsure of which form
to file, go to www.emcp.net/
3. Go to www.emcp.net/
printtaxforms and print off one or
two copies of the correct form.
4. Start filling out the form. Take
things slowly, line by line.
5. You need to determine your filing
status. You must file as one of the
following: a single person, head
of household, qualifying widow,
married filing jointly, or married filing separately.
6. You next claim an exemption for
yourself and for any dependents
you may have. You cannot claim
a personal exemption for yourself
if anyone, such as your parents,
has claimed you as a dependent.
7. You must state the amount of
income you earned in the last
year. Your W2 form comes in
handy here. It identifies the dollar
amount of income you earned
working at your job.
8. You may also list certain adjustments to your income. These
adjustments include expenses
that you incurred over the year
(moving expenses, tuition and 14 (364-389) EMC Chap 14 9. 10. 11. 12. 11/18/05 10:58 AM fees deduction, health savings
account deductions, and more)
that will lower your taxable
income and thus reduce the
amount of taxes you must pay.
You may take the standard
deduction (which is something
else that will lower your taxable
income). The amount of standard
deduction you take depends
upon your filing status.
If you do not take the standard
deduction, you may take certain
“itemized deductions” instead. Like
exemptions, adjustments, and the
standard deduction, itemize...
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This document was uploaded on 01/16/2014.
- Winter '14