Can someone explain how taxes work ?
I’m a 20 year old and I make about $4000 before taxes monthly. Every week I make $1000 but after taxes is taken out I take home about $818 so I make $3200. Someone told me today that I should’ve been filing as exempt but I’m not sure how true that is considering I make $48000 a year. Another question is do I have to file? This is my first year filing and since I know I’m not gonna get much back I don’t feel like really wasting my time doing all the paperwork to file. I heard you can go a few years without filing before it becomes a crime.
- Anonymous4 weeks ago
perhaps i can help.
- AmyLv 74 weeks ago
You are legally required to file.
If you don't file and you are owed a refund, the IRS isn't going to harass you to take your money. But you'll want to have your tax return on record to prove that you don't owe them money, and to prove your income when e.g. applying for a mortgage.Filing can be done online, and it is very simple if you have only one source of income and nothing unusual to deduct.
- Wayne ZLv 74 weeks ago
A bit of advice....
Never take advice from the person that told you that you should file Exempt......about anything.......
- cosmoLv 74 weeks ago
You are legally required to file a tax return. True, they won't actually throw you in jail for a few years, but not filing can cause other bad things to happen.
It may be worth your while to pay a professional to do your tax return, because it's complicated and there may be numerous legal ways to minimize your taxes and maximize your return. The improvement in your tax rate will quite possibly compensate for the fee of a paid preparer.
Alternatively, the on-line version of some of the tax programs (TurboTax, etc.) are very cheap, but they won't intelligently hunt down tax deductions for you.
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- EvaLv 74 weeks ago
Do NOT file as exempt.That's only for people that have no tax liability and it would leave you with a huge tax bill when you file your taxes. If all you have is a W2, it doesn't take much time to file. You might even get a refund. If you don't file, you give up the right to any refund after 3 years.
- 4 weeks ago
That is not true at all, whoever told you that has no idea how it works.
Yes, you must file an income tax return. You are WELL above the threshold to require filing. It will take you very little time to file if you had one job and no investments, etc. Might take you 15 minutes or so.
You also cannot go a few years.
- babyboomer1001Lv 74 weeks ago
What you "heard" is WRONG and if you do not file every year that you have income, you will be charged a very hefty penalty and interest, and if you let too many years go by, they'll come knocking on your door and haul you off to jail. That said, do not file as exempt. You will be hit with the full amount due when you file and that's a LOT of money that you will have to pay at once, when you send in your tax return. It makes a whole lot more sense to have some taxes paid from every pay check, so that little is owed at the end of the year or so that - you might even get a refund. If you can't figure out how to file, hire an accountant. If you don't have a lot of investments, the cost will be minimal, perhaps $150.
- Max HooplaLv 74 weeks ago
The someone who told you to file as exempt needs to pull their head out of where the sun don't shine. A single person earning $1,000 per week will owe $4,620 in federal income tax plus Social Security and Medicare tax of $3,798 plus any state taxes. And yes you have to file.
- StephenWeinsteinLv 74 weeks ago
You should not have been filing as exempt.
You do have to file.
You have to file for every year. You can't save time by not filing.
What you apparently misunderstood was that you can file a few years late and just pay a penalty or not get back anything back, without it actually being a "crime". But you do have to file for every year, eventually, and it's going to take more time if you wait. Plus, if you are over 3 years late, then you can't get back anything.
- Anonymous4 weeks ago
It should not take you more than 10-15 minutes at the most to do your taxes. And you will probably get money back. So why not just do it?
Yes, you have to file unless you make a very small amount. Way less than you.
You can do your taxes online with ZERO paperwork.