Paying Taxes in the USA

Every resident of America who has a job or any other income is required to file a tax return every spring. A tax return in the United States is called “Tax Return” not to confuse it with “Tax Refund”.

When is a US tax declaration filed?

You can file a tax return from January 1, but no one starts so early, because often you need extracts from various banks, insurance companies, and so on to file a tax return. They are usually sent out throughout January, so no one is filing until February. Usually, the declaration begins on February 1.

The deadline for submission is usually April 15 each year, but in case of a weekend, it is moved back and forth on the next working day. In 2017, it was moved to April 18.

Who should file US tax declaration?

You are required to file a tax return if you:

  • are a U.S. tax resident;
  • received income for the entire last year for a certain minimum amount.

Who is a US tax resident?

  • US tax residents are primarily US citizens;
  • Permanent residents (green card holders);
  • Holders of a work permit (L1, H1-B, F1, and so on). In many cases, even a person who does not have the right to work can also get unearned income (alimony, dividends, rent, royalties) and is also considered a tax resident.

What income level should be declared?

Almost all income can be taxed. Here is a small, and probably incomplete list:

  • salary, bonuses, vacation pay, commissions, tips;
  • dividends, interest on deposits;
  • income (on the difference) from the sale of property, securities, etc.;
  • alimony;
  • pension payments;
  • all kinds of benefits (disability, unemployment, etc.);
  • income from renting out real estate;
  • royalties;
  • prizes, winnings, legal compensation;
  • some types of grants, including student, etc.

But not all tax residents need to report income. If you did not receive any income last year, or your income was very small, then you do not need to declare anything. It also depends on whether you are working, what age you are, marital status, and if you are married – the method of filing declarations.

What is tax refund?

You almost always pay taxes throughout the year, for example, on a quarterly basis. Or your employer pays them for you. During the course of a year, many life circumstances can happen that, as deductions, reduce your tax base. And the government will return your “extra” money.

For example, you have a child, you spent a lot of money on medicine or charity, you lost money on the stock exchange, you could not work for several months, and other events will be deductions on your Tax Return. In this case, the tax office will refund you “extra” taxes – send a check by mail, or return your money by bank transfer back to the bank.

There are a lot of different deductions. It is because of deductions that there is a whole number of tax consultants who offer to “optimize” your taxes, add one or another deduction, present this or that waste as a deduction convenient for you, and so on. It’s nice to get such an unexpected bonus of a couple of thousand dollars!

How is tax declaration submitted?

Tax return is sent to the IRS (Internal Revenue Service) in two main ways:

  • by paper letter – for those who fill out the declaration by hand;
  • online, it is much more convenient. The IRS provides several ways to do this: filling out tax forms directly on the IRS website, hereusing commercial services like TaxAct, Turbotax, TaxSlayer, H&R Block, Credit Karma and others.

Filling out the declaration online is much more convenient. It’s safe to say that most Americans are doing just that today.

Do I submit myself?

Most Americans file their tax return on their own – the aforementioned services make the process simple and convenient now, and it now takes no more than half an hour.

Nevertheless, there are always elderly people, people who are confused about tax forms, people who are simply afraid to fill in something wrong, people who have too complex income and deductions to understand all the nuances, and prefer to use the services of a Tax Return Preparer.

The IRS website offers several tips for choosing a tax consultant and they even have a small database for finding the nearest consultant in your area.

There are also many places where free advice on how to fill out a tax return is provided. Check with your city library, or your nearest Walmart. Here, for example, almost all libraries not only advise, but also help to send your declaration in e-form, completely free of charge.

Tax forms

Filling out the tax form is not too difficult. You answer the questions one by one, try not to miss anything. You just need to choose the right shape.

After all, there is a whole series of tax forms, from simplified to very complex and detailed.

They have scary numbers and can easily get confused. Here is a good website explaining the difference between all the many variants of the 1040 form (1040-A, 1040-EZ, 1040-PR, 1040-SS, and so on).

As for me, this is another good argument in favor of online services (there the form type is selected automatically) or the services of a tax consultant.

Tags: tax, tax system
Category: General
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