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)
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
3
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
5
Income—Line 1
6
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
7
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.
8
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
10
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
25
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
34
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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---end of presentation---
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