September 24, 2018 0

The Introductory Guide to Doing Your Taxes

The Introductory Guide to Doing Your Taxes

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.

Why We Need to File a Tax Return

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.

How to File a Tax Return?

There are three main ways for filing your tax returns. They are as follows:

  1. If you opt for manual way, then you have to fill out form 1040 as per the instructions provided by Internal Revenue Service (IRS) of UK and send the form to IRS with the payments if any you owe.
  2. If you want to make use of modern day technology, then you can make use of software or website of the concerned authorities for filing the tax return. While making use of any of these services, you have to answer a series of questions regarding your incomes and proposed deductions. Then, you have to fill form 1040 online and file the return electronically.
  3. If you are not confident about doing it yourself manually or online, you can seek the help of any of the local accountants in the UK. They will help you file return in the proper way and get the maximum refund on the payments you have done already.

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.

Getting the refund on paid taxes

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.

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