There are multiple progressive slabs upon which the income tax is calculated. Below a certain amount of AGI, the income is considered exempt from tax. The slabs are regularly adjusted for inflation and other factors. Every person with an income is expected to prepare an income tax return and this includes minors and teenagers. Every citizen or resident alien that is earning is required to file a full tax return and pay the tax in full, every year within April 15th. An extension may be requested for the filing the return but the tax must be paid within the give date, which is 15th April every year.
There are several ways to file your income tax but each way requires preparing your returns and this the toughest part for most people. You must be very careful while preparing your return and make sure that you have mentioned everything. The tax returns require full disclosure of every taxable income, property and asset. You may not hide any part of your total income or else it will be considered tax evasion, which is a federal crime and can be charged as a felony.
Any delays in paying the taxes and filing the return will result in having to pay for fines and interest charges. Thus it is important to prepare your income tax return on time and with accuracy. But it is difficult job for many to prepare and submit their income tax because of complicated financial situations, like multiple business owners. So the IRS brought out a very helpful service called e-file, to help taxpayers file their returns online.
The IRS has approved certain competent websites to provide this e-file service to taxpayers. These websites offer complete tax solutions to their client in exchange of a small fee. Using these websites you can calculate your tax, prepare and file your returns and pay your taxes without doing any paperwork whatsoever. Preparing your income tax returns on their advanced software is a breeze and you will get help in form of suggestions and lists of various tax policies, deductions and tax credits. You can also file for an extension online (so that you can submit your returns later but you have to pay your taxes by April 15th). You can also schedule tax payments for future dates and use credit cards to pay your taxes through these e-file service providers.
About the Author:
Learn more about Income Tax Preparation and 1040 tax returns from our website.
Author: Gen Wright
Income Tax is levied progressively on the Adjusted Gross Income (AGI) of a person. The AGI is derived in two steps from the actual income of the individual. The actual income is first taken through basic deductions like employer paid health insurance etc. The amount obtained after the initial deductions is called the gross income. The gross income is then taken through the standard deductions list or the itemized deductions list, as may be applicable for the individual. At the end of the second stage, the AGI amount is obtained and the income tax is calculated on the basis of that amount.