If you work in the United States and earn money from an American company, you must pay state and federal income taxes. Usually, your employer will withhold (hold back/not give you) a certain amount each time you get paid. At the end of the year, three things are possible:
- They did not withhold enough, and you must pay more.
- They withheld too much, and the government returns the extra money to you. This is called a refund.
- They withheld the right amount, and you break even (you don’t need to pay, and the government does not need to pay you).
We have 4 months to “do our taxes” (from January 1 to April 15). When you do your taxes, you:
- add up all the money you have received
- subtract all the money your employer withheld
- subtract other money you spent on things for your job, medical bills, education, charity, etc.
- figure out if you owe (must give) money to the government, or if they owe money to you
- complete some tax forms
- file your taxes, which means you send your tax forms to the IRS (Internal Revenue Service)
- pay if you owe taxes OR tell the government where to send your money if they owe you
It sounds complicated, but there are many computer programs that make doing your taxes easy. You can also pay a tax professional to do your taxes for you. You can also file your taxes online, pay your taxes online with a credit card, and get the government to put your refund directly into your bank account.
Taxes are due on April 15. You can do your taxes early, but if you do them after April 15, you will have to pay a penalty.
If you have not done your taxes yet, you only have a few more days. If you need help, there are places you can go for assistance. When you go, volunteers will help you prepare and file your taxes. Click here for locations and information about what you need to take with you.