Intro to Taxes
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We get it, no one likes tax season. Filing tax can also feel daunting if you don’t know where to start. But almost everyone (including businesses) within the U.S. needs to pay federal and state income taxes to the Internal Revenue Service (IRS) and state taxes. So it’s an essential and unavoidable skill to learn at some point in your life. To show that you have paid the right amount of taxes, you'll have to file an annual income tax return. Your return shows what proportion of income you have earned during the year, what proportion of tax you have to pay, and how much you really paid. If you overpaid, as most people do, you’ll get a tax refund. If you underpaid, you'll owe more.
You can file your 2020 taxes between January 2021, and April 15, 2021.
Almost everyone uses Form 1040, the most basic form. This form walks you through calculating what proportion you earned and then helps you create income adjustments. Adjustments are expenses you made that the government allows you to exclude from your annual income and that they take the shape of either tax deductions or tax credits. Claiming any of those would require you to fill out more forms.
The forms and process have changed a bit in recent years, most importantly after the Tax Cuts and Jobs Act of 2017, but this has actually simplified the method in some ways. This guide will explain everything you would like to understand about the way to file your taxes. You got this!
Disclaimer: This article is written for the 2020-2021 tax year
Edited by Vanessa Wong
Guest Author Spotlight: Joyce Lam
Joyce is a Tax Site Supervisor for VITA program at IRS. She is also a founder of Kaimore, a nonprofit that promotes economic mobility by providing targeted professional development services for those who are underprivileged.
