How to fill out a Tax Return
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1 How to fill out a Tax Return A tax return for a typical teenager (2007 return) (about 44 slides)
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A tax return for a typical teenager (2007 return). How to fill out a Tax Return. (about 44 slides). Tax Return Forms. Form 1040 all adjustment, deduction, and credit options included. Form 1040A Only the most popular adjustment, deduction, and credit options included Form 1040EZ - PowerPoint PPT Presentation
Transcript of How to fill out a Tax Return
1
How to fill out a Tax Return
A tax return for a typical teenager
(2007 return)
(about 44 slides)
2
Tax Return Forms• Form 1040
– all adjustment, deduction, and credit options included.
• Form 1040A– Only the most popular adjustment, deduction,
and credit options included
• Form 1040EZ– No adjustments, only Standard Deduction, and
only Earned Income Credit included– No dependents
• e-File– www.irs.gov/efile
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1040 Form 1040EZ FormGross Income- Adjustments
(AGI)-Deductions
-Personal ExemptionTaxable Income
Gross Tax Liability-Tax Credits
Net Tax
TaxTable
Gross Income- (Deductions + PE)Taxable Income
Net Tax
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1040EZPersonal Information
123 45 6789Alex
7956 Cottonwood Lane
Sacramento, CA 95828
Mayer
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Income—Line 1
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Gross Income• Wages and Tips are taxable• Unemployment compensation is taxable• Babysitting money is taxable• Scholarship money used for tuition or books is
not taxable; it is not income—it’s tax free.
• Scholarship prize money, if you don’t use it for education, is taxable
• Scholarship money used for room and board is taxable
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Wages and Tips
• Your employer keeps track of how much money you’ve earned for the whole year
• They also keep track of how much money they withheld from your paycheck for the whole year.
• This information is on your W-2 form
• You receive your W-2 form from your employer by the end of January.
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W-2 Form
The Regents of UC
La Jolla, CA 92023
572.00
98.50
8,250.00
8,250.00
Fed Taxes Withheld
MayerAlex
7956 Cottonwood Lane
Sacramento, CA 95828
Wages
State Taxes Withheld
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Income—Line 1
8,250 00
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Taxable Interest—Line 2
8,250 00
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Taxable Interest
• Interest you earn in a bank account is taxable income.
• Your bank keeps track of how much interest you have earned for the whole year.
• This information is on form 1099-INT• Your bank will send you a 1099-INT in
January, AND send a copy to the IRS
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1099-INT
Wells Fargo Bank
San Francisco, CA 96061
Alex Mayer
7956 Cottonwood LaneSacramento, CA 95828
5.74
Interest Income
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Taxable Interest—Line 2
6 00
8,250 00
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Unemployment Compensation—Line 3
8,250 00
6 00
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Unemployment Compensation• If you are fired, you can collect
Unemployment Compensation money as you look for another job.
• You cannot collect any money if you quit your job.
• The state of California keeps track of how much unemployment compensation you received.
• This information is on form 1099-G
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1099-G
Alex Mayer
7956 Cottonwood LaneSacramento, CA 95828
California Dept of Revenue243.15
Unemployment compensation
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Unemployment Compensation—Line 3
8,250 00
6 00243 00
If you were not fired, your Unemployment compensation (Line 3) will be blank.
Will your Line 3 be blank? Yes, let’s hope so…
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Total Income—Line 4
8,250 00
6 00243 00
Just add lines 1, 2, and 3
8,499 00
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Standard Deduction and Personal Exemption
Line 58,250 00
6 00243 00
8,499 00
Dependents check Yes and fill out worksheet
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Dependent’s Worksheet(on back of 1040EZ)
8,250.008,550.00
8,550.00
5,350.005,350.00
--0--
5,350.00
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Standard Deduction and Personal Exemption
Line 5
8,250 006 00
243 008,499 00
5,350 00
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Taxable Income—Line 6
3,149 00
Line 4 – Line 5
8,250 006 00
243 008,499 00
5,350 00
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Tax you already paid—Line 7
3,149 00
8,250 006 00
243 008,499 00
5,350 00
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W-2 Form
The Regents of UC
La Jolla, CA 92023
572.00
98.50
8,250.00
8,250.00
Fed Taxes Withheld
MayerAlex
7956 Cottonwood Lane
Sacramento, CA 95828
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Tax you already paid—Line 7
3,149 00
8,250 006 00
243 008,499 00
5,350 00
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Credits and Tax—Lines 8 and 9
8,250 00
6 00243 00
8,499 00
3,149 00
5,350 00
The EIC is for people 25 years or older, not a dependent, and earning very little money.
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Credits and Tax—Lines 8 and 9
8,250 00
6 00243 00
8,499 00
3,149 00
5,350 00
572 00
Line 7 + Line 8
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Tax you owe—Line 108,250 00
6 00243 00
8,499 00
3,149 005,350 00
572 00
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Tax you owe—Line 108,250 00
6 00243 00
8,499 00
3,149 005,350 00
572 00
Tax Table
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Tax Table
Taxable Income
$3,149.00
Single
Tax = $313
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Tax you owe—Line 108,250 00
6 00243 00
8,499 00
3,149 005,350 00
572 00
313 00
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Refund—Line 11a572 00
313 00259 00
No Amount owed—Nothing on
Line 12
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Refund—Line 11a572 00
313 00
259 00
He only owed $313.00 in taxes for the year.
Alex had $572.00 withheld throughout the year.
He receives a $259.00 refund at the end of the year.
How much money did Alex pay in taxes? $313.00
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Amount you owe—Line 12
213 00
313 00
100 00
They owe $313.00 in taxes for the year.
This person had $213.00 withheld throughout the year.
They must pay $100.00 by April 15th.
How much money did they pay in taxes? $313.00
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Amount you owe—Line 12
263 00
363 00
100 00
No Refund—Nothing on Line 11a
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Sign your tax return572 00
313 00259 00
Alex Mayer Sales Clerk 916 689-8600
4-04-08
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Staple the Federal copy of your W-2 form to your tax return
Put it in the mail by midnight,
April 15
Keep a copy (and your 1099 forms) for your records
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Review
6 Questions
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1. How do you know how much money you earned in
wages last year?
W-2 form(from your employer)
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2. Which form shows how much bank interest you earned?
1099-INT form(from your bank)
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3. Which tax return form contains all possible
adjustments, deductions, and credits?
1040 form
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4. Which tax return form are teenagers likely to use?
1040EZ form
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5. Jim got a $56.00 refund last year. Al had to pay $150 on April 15th. Who paid more in taxes?
Cannot tell.
Income taxes are paid each payday throughout the year—not
just at the end of the year.
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6. How do you get a “refund”?
Employer withholds too much Federal Income tax throughout
the year
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