How to Fill Tax Return?

how to fill a tax return

A tax (from the Latin taxo; “rate”) is a financial charge or other levy imposed upon a taxpayer (an individual or legal entity) by a state or the functional equivalent of a state such that failure to pay, or evasion of or resistance to collection, is punishable by law. Taxes are also imposed by many administrative divisions. Taxes consist of direct or indirect taxes and may be paid in money or as its labour equivalent.

If you feel you are owed a refund, you are probably anxious to file your tax return. Filing a tax return early has many advantages. By filing early, you not only avoid the long lines of fellow procrastinators at the post office on April 15th, you avoid the possibility of a last minute headache from trying to rush through your tax return. Be careful when filing taxes early though. Filing a tax return early also has its disadvantages. This is the most misunderstood term. Tax “return” does not mean that you are filing papers to get your taxes returned, although this may be the result. Instead, what it refers to is the act of “returning” a report to the US Government (IRS) that states what you received during the previous tax year, what you were taxed on this income, and what you should have been taxed. When filing a report of this nature you may discover that you paid too much tax on your income and therefore are eligible for a refund. Alternatively, you may discover while filing this report that you did not pay enough taxes you will owe money to the IRS. You have until April 15 (June 15 if overseas, or earned no income) to file this “return”/report to the IRS for the preceding year.

Though many people think of filing their tax returns as a dreaded chore to be postponed for as long as possible, there are many reasons why it can make sense to file early.

Get your refund faster. If you’ve overpaid your taxes and are expecting a refund, it makes a lot of sense to file early. You’ll get your refund sooner not only because you’re filing earlier, but also because the IRS probably won’t be as busy in January, February or March as it will be in April and beyond.

Get it over with. Why spend the first three months of the year with nagging thoughts of April 15 in your mind when you have the option to get it over with now? Avoiding procrastination can give you a lot of peace of mind that will make you happier and more effective in other, more important areas of your life.

Avoid crowds at the post office. According to the IRS, in 2010, 70% of taxpayers filed their returns electronically – that means the other 30% are still mailing theirs, and joining the crowds at the mail office to do so. If you’re planning to be one of them, whether out of habit, a desire to avoid the unnecessary expense

of electronic filing, or the belief that paper filers are less likely to get audited, consider the extra time you’ll have to waste at the post office if you wait until April 15 to mail your return(To learn more about audits, see Surviving The IRS Audit.)

Avoid the possibility of being late and owing more. You might think you’ll have plenty of time to prepare your return on April 14, but you can’t predict what life might throw at you. If you have the time now, why not get your taxes taken care of? If it turns out that you owe money and you end up filing late, you’ll waste money paying interest and possibly penalties. (To learn more,

Put your best foot forward. You might sit down at the last minute to do your taxes only to discover that something is making your tax situation more complicated than you’re used to and that you won’t have time to figure it out before you submit your return. What’s more, if you’re in a hurry, it can be easy to mess up even the simplest return by forgetting to enter your Social Security number or making an error in a calculation.

While many people simply put off filing their tax returns until April – waiting until the last minute like most of us do with any deadline – it turns out that procrastination isn’t the only reason to wait when it comes to your taxes.

Maximize your interest. If you’re going to owe money to the IRS, why give it to them any sooner than you have to? You can still complete your return early and turn it in, but you don’t need to pay until April 15. Keep the amount you owe in a safe, interest-bearing account and earn a few extra bucks for yourself.

Avoid amending your return. Sometimes employers, universities, mortgagees and investment companies make mistakes on the tax forms they file to report your wages, tuition costs, mortgage interest and investment income to the tax authorities. If you file your return based on this incorrect information, you’ll have to file again once the mistake is fixed and new forms are mailed out to you and the IRS. Not only does filing twice take some time, you’ll likely find that you owe more or less tax based on this new information. If you file early, get a refund, and spend it right away, will you have the money to pay up if your tax liability suddenly changes?

Nonresident F, J, and M visa holders who earned any US source income during the tax year must file tax returns on Form 1040NR, U.S. Nonresident Alien Income Tax Return, or Form 1040NR-EZ, U.S. Income Tax Return for Certain Nonresident Aliens With No Dependents. They must also file an 8843 Statement for Exempt Individuals or Individuals With a Medical Condition. F-2 and J-2 spouses and children who earned no U.S. source income during the tax year need only file a form 8843.

Source: www.howdofinance.com

Category: Taxes

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