If you have got a job with a handsome salary package, then you definitely have to pay taxes. The taxes you have to pay are calculated based on your salary and are to be paid to the state or federal government. So, if you are new to tax-related transactions, here is the ultimate guide to doing your taxes.
For a beginner, the payroll withholding is not absolutely correct always. The decisions made by you to set up payroll withholding at the start of your job can result in you paying less or extra tax amount. You can reduce the tax you have to pay and can get the refund on taxes you have already paid by mentioning certain deductions provided in the tax code. On the other hand, if there is the addition in your income, then you have to report legally about it, the tax you have to pay thus increases. Considering all these factors, you have to file the tax returns every year. Through the process of filing the tax return, it is resolute if you owe more taxes than what you have paid previously to the state or federal government or if you owed a refund on the taxes you have already paid.
If you fill the form manually, it’s absolutely free of cost. If you go for the online method you may or may not have to pay the fees for using the software program, but with the third option of taking professional help, you will definitely have to pay the fees of the professional.
Once you enter the relevant information regarding your income, deductions, and credits by making use of any of the above three methods, you will be able to determine whether you owe an extra amount to the government or you owe a refund. If you find out that you owe some extra money, you have to send that money to concerned government agencies like the IRS or revenue department of your state along with the tax return. If the amount is so big that you cannot pay in one installment, you can set up a payment plan. If you find out that you owe a refund, your money will be refunded to you by mailed check or bank deposit.
If you are filing the return for the first time, it is recommended to take the help of accountant & bookkeepers to get it right. You can save the copy of the tax return for your records and make use of it as the reference for filing the return next year. It will also helpful for you if IRS proposes an audit.