I’ve only recently joined the working force, and I am still not sure of this entire concept.
I know I am supposed to go to an accountant and show him a slip from my job for the returns, and also slips from my stocks that show all the net changes.
What I don’t understand is \*why\* I receive a certain amount after doing all of that.
In: 8
You are required to file a tax **return** by April 15th. This is the 1040 form (plus others if it is complicated) where you state how much you made and what deductions you have that figures out how much in taxes you need to pay for the year. You also total up the amount of taxes that you paid (your work takes money out of each paycheck) and certain credits (Child tax credit, earned income tax credit). After doing the math, you end up with “you owe this much” and “you have paid this much” if the amount you owe is less than what you paid, you get a tax **refund**. Otherwise you need to send the IRS what you owe.
You do not need to go to an accountant to file your tax return. You can do your taxes yourself or you can use software like Turbo Tax. If you make less that $73,000, you can use [IRS Free File](https://www.irs.gov/filing/free-file-do-your-federal-taxes-for-free)
You probably need to repeat the process for your state taxes.
For stocks, you only owe taxes on dividends received and net capital gains (sell price – buy price). If you sell stocks after holding for longer than a year, you owe taxes at the long term rate which is lower than normal income tax rates
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