As tax season continues, it is important to know what necessary measures need to be taken in order to file, according to Assistant Professor of History and Political Science Laura Merrifield Wilson.
There are multiple forms and terminologies that students need to be aware of when filing taxes, and multiple steps in filing taxes, dependent on income, schooling, charitable donations, among others, according to Wilson. The different steps also impact how long it takes for a person to receive state and federal returns. The amount of money an individual receives is determined by their personal circumstances.
The process of filing taxes begins with gathering all the necessary paperwork from all places of employment throughout the year, according to Certified Public Accountant and Partner of Audit and Assurance Services Eric Woodruff.
“The big thing for taxes, for a student, is making sure you have your W-2’s for every job you had during the year. So, if you had a job during the summer, you should receive a W-2,” Woodruff said. “If you worked for cash, or you were paid and didn’t receive a W-2, sometimes they’ll issue a 10-99, and you still have to report that as income as well. So, when you get your tax report at the end of the year, you need to make sure you have your W-2’s and [or] your 10-99.”
The difference between a 10-99 form and a W-2 form is dependent on the type of income received, according to Woodruff. If the pay is received informally, or from self-employment, then a 10-99 will need to be filed. However, a W-2 is filed when a job provided official pay stubs throughout the year. Another form that must be understood is the W-4 form, which is a form filled at the beginning of employment, determining how much money will be withheld for taxes from each paycheck, according to Woodruff.
When filling a W-4 form, an individual must determine the amount of exemptions that they would like. If an individual chooses zero, more taxes will be taken out than if they had chosen one exemption. Tax exemptions reduce the amount of taxable income from an individual, according to Wilson. In order to claim an exemption, one must file as either joint, married or single, and the amount of exemptions relies on how many dependents, such as children, are claimed. If an individual is married, or has dependents, that individual can claim two or more exemptions on their W-4 form.
“If you want to claim certain exemptions, you would list that on your W-4 form before you file,” said Wilson. “When you get the W-4 form, they will ask how many exemptions you want, and they usually give you a guideline of how much you’re allowed to take.”
Wilson said that the more tax exemptions that are claimed, the more that is returned.
There are multiple different ways to start the process of filing taxes, according to Wilson. Some of these include online tax filing systems, such as TurboTax, hiring an accountant, and filing a 10-40 EZ, which is a simplified process to filing taxes, said Wilson. Once the paperwork has been processed, a return amount is determined. The amount that is returned to the individual depends on how much the Internal Revenue Service owes the individual after all taxable income has been considered, according to Wilson. The amount returned is determined by combining the information from all forms that are filed.
According to Associate Professor for the School of Business Stephen Maple, there is a tax rate schedule, or an online source for determining the amount refunded, which are both easily accessible and will figure the amount in returns after all taxable income is considered. Another way to figure the amount being returned is by using the IRS’s website to calculate taxable income per individual, according to Maple.
According to Wilson, the average time for processing and returning taxes is four weeks. However, this is dependent on how early the paperwork is filed. The earlier the papers are sent to the IRS for processing, the sooner they can be processed and the return checks can be mailed out or directly deposited into a checking account. While four weeks is the average rate of return, this process can take longer depending on the status of the IRS, meaning whether or not the IRS is active due to the previous government shutdown, according to Wilson.
The deadline to file taxes is April 15, and if the paperwork to file is sent after this date, the opportunity for a penalty charge will arise. The amount of this charge varies depending on how late the paperwork is filed after the deadline, as well as certain details within each individual’s statements.
According to Woodruff, the main focus for students when preparing for filing their taxes should be on ensuring that all the forms are received from the employer.