Most employers are required to withhold your estimated income tax from your pay. When you start working your employer will have you fill out an IRS Form W-4. You report the number of exemptions from income tax that you want your employer to use when it calculates the taxes it will withhold from your pay. The tax year runs from January 1st through December 31st for income tax purposes. Employers have until January 31st to send you your Form W-2 which will list how much you earned and how much was withheld for income tax and for other mandatory withholdings. Generally, the fewer exemptions you claim, the more tax is withheld through the year. If you don’t have enough withheld, you will have to pay taxes when you file your tax return. Tax returns must be postmarked or transmitted by e-filing on or near April 15th. Your “return” is the IRS form you use to report your income, usually Form 1040 or 1040A or 1040EZ. This form helps you calculate how much you must pay or how much you are entitled to have refunded from the amount your employer withheld. Forms and instructions for completing them are available from the IRS on-line. In addition, many libraries and post offices offer free paper copies. You can also call the IRS and request that they mail the forms to you.
If your employer doesn’t withhold taxes, then it should provide you with an IRS Form 1099 at the end of the year stating what you earned. You must file your return with your W-2 or your 1099 (people with more than one job will have more than one W-2 or 1099). Keep records of the money you spend on child care, medical expenses, uniforms, equipment or other work expenses, education costs, contributions to charity and interest you paid on loans so that you can calculate any authorized deductions from your taxes. Many Americans find that the “standard deduction” every taxpayer can claim results in lower taxes than itemizing allowable deductions. An entire industry has developed to help people minimize their income taxes. Minimizing your taxes with legitimate exemptions and deductions is smart; evading taxes by not filing, failing to report income or lying about exemptions, deductions or your finances can result in criminal charges.
The IRS provides mobile applications and online tools to assist you in calculating your taxes and tracking your refund, available through the website described below.