Since 2014 was my first year earning an income, this will be my first time paying income tax, which means it's time to learn about that and decide how to proceed. Obviously there are the companies like H&R Block and Turbo Tax which many use, although I would rather learn how to do it myself and in the process learn some about what I can do to legally minimize the taxes I am required to pay (if only to use it during the following year). I will be attempting to claim tax deductions for FOTCM donations made this past year. My employer should issue me a W-2 form shortly.
U.S. income tax self-education?
- Thread starter HowToBe
- Start date
JonnyRadar
The Living Force
For what it's worth, I would try to find a CPA (certified public accountant) who is willing to take some time (even minimal paid time if you can afford it) to help educate you. The few CPAs I've known are actually quite interested in helping to educate people on the system and how to be compliant. There are also classes online that can run you through all of the basics, a simple google search will turn those up.
Also, this may sound like a no-brainer, but I have learned the last couple years to keep all my documents organized clearly in folders in a file cabinet. Having things printed out and easily accessible will go a long way to easing stress around doing this yourself.
One other thing about minimizing your payments is to keep ALL (and I do mean all) bills, receipts, anything whatsoever that you paid for, organized and tallied. There are a silly amount of tax deductions available, but they also require a silly amount of work to keep them all straight. Everything from gas for your car to a portion of your food can be deducted in some way. Just make sure that you get to speak to a professional and have them look everything over before you send it in. They may, and probably will, catch a few mistakes.
Good luck!
EDIT: If keeping your receipts straight every day sounds like a chore, you can designate a few folders or boxes to throw everything in. Every time you get a receipt from somewhere, toss it in there, and then once a month run through them and highlight the date and the total on each receipt, and staple them together with a post-it label for that month. This turns out to be a huge help when you reach year-end. This past year I ended up going through all of my stuff for the year at once, and I'll do my best to never do that again.
Also, this may sound like a no-brainer, but I have learned the last couple years to keep all my documents organized clearly in folders in a file cabinet. Having things printed out and easily accessible will go a long way to easing stress around doing this yourself.
One other thing about minimizing your payments is to keep ALL (and I do mean all) bills, receipts, anything whatsoever that you paid for, organized and tallied. There are a silly amount of tax deductions available, but they also require a silly amount of work to keep them all straight. Everything from gas for your car to a portion of your food can be deducted in some way. Just make sure that you get to speak to a professional and have them look everything over before you send it in. They may, and probably will, catch a few mistakes.
Good luck!
EDIT: If keeping your receipts straight every day sounds like a chore, you can designate a few folders or boxes to throw everything in. Every time you get a receipt from somewhere, toss it in there, and then once a month run through them and highlight the date and the total on each receipt, and staple them together with a post-it label for that month. This turns out to be a huge help when you reach year-end. This past year I ended up going through all of my stuff for the year at once, and I'll do my best to never do that again.
You can print out two forms here: http://www.irs.gov/uac/Form-1040EZ,-Income-Tax-Return-for-Single-and-Joint-Filers-With-No-Dependents
If you fall within the requirements for the EZ form (single, no dependents). You can use your W-2 to fill in all the information on the forms. Then you file online for free at 1040.com. That website will do all the filling in of the boxes for you, but I still prefer to do it myself first to make sure everything's kosher. That's just federal. For state taxes, you'll probably have to pay to file but you should be able to use the information in the forms you filled out.
If things are bit more complicated than that for you, I would recommend taking Jonathan's advice.
If you fall within the requirements for the EZ form (single, no dependents). You can use your W-2 to fill in all the information on the forms. Then you file online for free at 1040.com. That website will do all the filling in of the boxes for you, but I still prefer to do it myself first to make sure everything's kosher. That's just federal. For state taxes, you'll probably have to pay to file but you should be able to use the information in the forms you filled out.
If things are bit more complicated than that for you, I would recommend taking Jonathan's advice.
Heimdallr said:
I also learned from many good books out there that get renewed yearly for the latest information. They seem real thick because they cover many topics that won't apply to you like if you have a small business or rental property. The tax instructions that come with the forms do a pretty good job of what you need to do.
To deduct charitable contributions, you need to file a 1040 Schedule A. If the amount isn't more than the personal deduction ($6,100 in 2013 tax year), then you don't need to report it. Schedule A also allows you to deduct some medical expenses and sales tax you paid as well as some job expenses.
Filing the tax form is really pretty easy for a single person without a house or children.
Texas doesn't have a state income tax so you don't have to worry about that.
Good luck, learning is fun. ;)
Wow, thanks for all the pointers! It will definitely take some figuring out. Now that I think about it, I think my job actually offers a "free" session with a CPA once a year, although I'll have to read up on it. The thing that makes it iffy for me is that it might be paid for by donations of other employees. No free lunch, so I shy away from that route. On the aside, the company also offers to pay for counseling/therapy, at least if it's relevant to one's ability to work, but I think it works the same way.
I used to use tax software that no longer exists now, but it was really handy. They're all pretty much the same thing in terms of functionality, anyway. It cost about $30, and it would walk you through everything, including deductions for donations and things like that.
The handy thing was that I didn't trust the software 100%, but it included all the up-to-date instructions and such so that at anywhere in the whole process, you could click a button and read all the rules to make sure everything was kosher.
So, even if you use software or a web site to help prepare your taxes, you can still sort of do it "manually".
But, it sure beats covering a table with all kinds of papers and forms and booklets that you have to find on the IRS site, print out, etc.
FWIW
The handy thing was that I didn't trust the software 100%, but it included all the up-to-date instructions and such so that at anywhere in the whole process, you could click a button and read all the rules to make sure everything was kosher.
So, even if you use software or a web site to help prepare your taxes, you can still sort of do it "manually".
But, it sure beats covering a table with all kinds of papers and forms and booklets that you have to find on the IRS site, print out, etc.
FWIW
Hi! Here are a few pointers I've learned although some have already been mentioned. Mainly, I've always done my own taxes. When I was employed by a company and received W2's, it was very easy and self explanatory following the yearly guide book. In the beginning I had a few years where I visited the local senior center that offered free help at tax time for the public. So there may be a service like this where you are.
Now that I'm self employed its a whole other story since this is where deductions and self-employment tax comes in. After researching on line I proceeded to do my own taxes and ended up ripping myself off big time, with a lot of taxes owed. I submitted my faulty paperwork by the deadline then set up an appointment with a H&R Block to look over what I had submitted. They offer a free session initially with a fee for actual work done by them. This man saved me $1700 and submitted a correction for me which took a good amount of his time. I had overlooked significant deductions I didn't know about. Now that I've done this with a professional, I know how to do it myself which is the plan for 2014.
So having a professional help initially is my suggestion, they can save you a lot of time and show you things that may have been missed.
Sadly, I'm now thinking I need to get on the ball with my own taxes...its a little depressing :(
The money could be used for something nice like a vacation in the Caribbean but it goes to (fill in the blank). I don't mind taxes going to the needy and actually helping people but the true story of our taxes is a gnarly mess.
Now that I'm self employed its a whole other story since this is where deductions and self-employment tax comes in. After researching on line I proceeded to do my own taxes and ended up ripping myself off big time, with a lot of taxes owed. I submitted my faulty paperwork by the deadline then set up an appointment with a H&R Block to look over what I had submitted. They offer a free session initially with a fee for actual work done by them. This man saved me $1700 and submitted a correction for me which took a good amount of his time. I had overlooked significant deductions I didn't know about. Now that I've done this with a professional, I know how to do it myself which is the plan for 2014.
So having a professional help initially is my suggestion, they can save you a lot of time and show you things that may have been missed.
Sadly, I'm now thinking I need to get on the ball with my own taxes...its a little depressing :(
The money could be used for something nice like a vacation in the Caribbean but it goes to (fill in the blank). I don't mind taxes going to the needy and actually helping people but the true story of our taxes is a gnarly mess.
SevenFeathers
Dagobah Resident
Before hiring a CPA or buying software to file taxes, why not study the law to see if you are even required to file? There is much information on the internet about the fraudulent nature of the United States income tax (for example, http://www.sott.net/article/271760-100-years-of-a-fraudulent-tax-system or watch Aaron Russo's "From Freedom to Fascism"). Perhaps you'll learn that the income tax is not even legal. Or even if it's legal, it's not LAWFUL. Remember, everything the Nazis did was LEGAL. (Hmmm. The IRS does use Gestapo tactics...at least against the little guys, not the big corporations -- see http://www.sott.net/article/237149-Thirty-companies-paid-no-income-tax-2008-2010) And if from your studies, you decide it IS legal, maybe you'll decide you don't want to voluntarily donate money to the ongoing United States war machine.
SevenFeathers
Dagobah Resident
Of course, we all appreciate taxes being used for needed services such as this: http://www.sott.net/article/291163-Now-that-the-Obama-Christmas-vacation-in-Hawaii-is-over-its-time-for-taxpayers-to-pick-up-the-hefty-tab
I hear you, SevenFeathers, and that's another aspect of this I'll need to research about. Lawful or not, however, for now I intend to file. Even if it's not in the books, the tax system amounts one hell of a binding "common law", OSIT. This thread gives a good example of this:
https://cassiopaea.org/forum/index.php/topic,15987.0.html
I have far less in terms of resources to defend myself with than she had (in terms of knowledge, social connections, and funds, OSIT), so were this to happen to me I would probably end up relying on whatever the network here could do to help, which might not even end up being much (for instance, I can't expect Laura et al to endanger their aims and the very existence of this forum for my sake). I would rather give up a little of my energy/money to appease the beast than draw attention that could end up wasting a lot of my energy/money and the network's energy, or killing me, or putting me in a position that may make it impossible to Work on myself and help improve the world's outlook.
As I see it, the risk versus reward isn't worth it. The amount of harm that my unpaid taxes could do to the elite would not phase them, while they have the power to take away years of my life, during which time they would likely use me as a tool to make even more money than the taxes I would have spent (either by prison labor or corrupt monetary and sales practices: see http://www.sott.net/article/266886-The-prison-industrial-complex-How-Wall-Street-profits-from-human-misery, http://www.sherrypeeljackson.org/newsletter/september-2011/, and http://www.sott.net/article/259586-Private-Prisons-The-more-Americans-they-put-behind-bars-the-more-money-they-make, for instance). As I see it, the "clever", or at least prudent, thing to do is to "give to Rome", but as little as I can while following their rules, even if some of them are "unwritten".
Maybe this is not the best way, and I am known to worry too much sometimes, but it's what I have right now, and I would rather accept the price of being able to continue learning and acting according to my knowledge in the present, so that I can do better in the future.
https://cassiopaea.org/forum/index.php/topic,15987.0.html
I have far less in terms of resources to defend myself with than she had (in terms of knowledge, social connections, and funds, OSIT), so were this to happen to me I would probably end up relying on whatever the network here could do to help, which might not even end up being much (for instance, I can't expect Laura et al to endanger their aims and the very existence of this forum for my sake). I would rather give up a little of my energy/money to appease the beast than draw attention that could end up wasting a lot of my energy/money and the network's energy, or killing me, or putting me in a position that may make it impossible to Work on myself and help improve the world's outlook.
As I see it, the risk versus reward isn't worth it. The amount of harm that my unpaid taxes could do to the elite would not phase them, while they have the power to take away years of my life, during which time they would likely use me as a tool to make even more money than the taxes I would have spent (either by prison labor or corrupt monetary and sales practices: see http://www.sott.net/article/266886-The-prison-industrial-complex-How-Wall-Street-profits-from-human-misery, http://www.sherrypeeljackson.org/newsletter/september-2011/, and http://www.sott.net/article/259586-Private-Prisons-The-more-Americans-they-put-behind-bars-the-more-money-they-make, for instance). As I see it, the "clever", or at least prudent, thing to do is to "give to Rome", but as little as I can while following their rules, even if some of them are "unwritten".
Maybe this is not the best way, and I am known to worry too much sometimes, but it's what I have right now, and I would rather accept the price of being able to continue learning and acting according to my knowledge in the present, so that I can do better in the future.
SevenFeathers
Dagobah Resident
HowToBe, thanks for your response.
You are certainly right about the risk. Our government does not like people who stand up against the tyranny. And those like Sherry Peel Jackson and Joe Banister who worked for the IRS can attest to that. Thankfully Ms. Jackson is alive and well and didn't die in prison. Here's her current blog: http://www.sherrypeeljackson.org/ And Joe Banister is still fighting the good fight -- http://freedomabovefortune.com/ Irwin Schiff is still in prison. In his case, the judge would not let him even talk about the law. I've read some of the transcripts. I personally know two other people who stood up for so called "rights" and were sent to prison (non income tax related). They thought they had "rights", they did have the law on their side, but the judicial system is corrupt in most cases. So, yes, there certainly is a risk. A big risk. At least for people such as you and I, not for the banksters and ruling elite who can get away with murder and just pay a fine.
As for me, I studied and learned about the tax. This was over 30 years ago when I was just a young woman. I took actions which brought bad consequences for me. That doesn't mean the information I had and the actions I took were invalid -- it means our government does not like dissent. I also naively thought I had rights and that the government would go by the law if I only pointed it out, but it doesn't go by the law, it uses intimidation and threat. However, now that I have the knowledge, I can't go back and take it out of my head, so I have to live with what I know and make my way the best I can. Of course, what I am able to do has no effect on the ruling elite and won't change the way things are. But I must act as I can, to be true to myself.
Having the knowledge (about this and other things) makes it more painful to read about how the system is abusing people and after reading things, feeling helpless to do anything about it. That's something I have to live with. It's hard to know, isn't it?
You are certainly right about the risk. Our government does not like people who stand up against the tyranny. And those like Sherry Peel Jackson and Joe Banister who worked for the IRS can attest to that. Thankfully Ms. Jackson is alive and well and didn't die in prison. Here's her current blog: http://www.sherrypeeljackson.org/ And Joe Banister is still fighting the good fight -- http://freedomabovefortune.com/ Irwin Schiff is still in prison. In his case, the judge would not let him even talk about the law. I've read some of the transcripts. I personally know two other people who stood up for so called "rights" and were sent to prison (non income tax related). They thought they had "rights", they did have the law on their side, but the judicial system is corrupt in most cases. So, yes, there certainly is a risk. A big risk. At least for people such as you and I, not for the banksters and ruling elite who can get away with murder and just pay a fine.
As for me, I studied and learned about the tax. This was over 30 years ago when I was just a young woman. I took actions which brought bad consequences for me. That doesn't mean the information I had and the actions I took were invalid -- it means our government does not like dissent. I also naively thought I had rights and that the government would go by the law if I only pointed it out, but it doesn't go by the law, it uses intimidation and threat. However, now that I have the knowledge, I can't go back and take it out of my head, so I have to live with what I know and make my way the best I can. Of course, what I am able to do has no effect on the ruling elite and won't change the way things are. But I must act as I can, to be true to myself.
Having the knowledge (about this and other things) makes it more painful to read about how the system is abusing people and after reading things, feeling helpless to do anything about it. That's something I have to live with. It's hard to know, isn't it?
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