If you plan, you will find it easier when it comes time to file your income tax federal forms. Federal tax forms are usually mailed to you if you have filed a return in prior years. Otherwise, you will have to locate your nearest IRS office. You can check on the IRS website about how to get your federal income tax forms. You can often fill out your tax forms online with a variety of tax preparation software. Certain versions are more appropriate for simple or complex returns.
You federal tax forms will help you calculate the amount you owe in taxes for the recently completed tax year. You should receive a form from your employer that will outline how much you made during the year. It should also include all of the deductions taken off your pay cheque for you. This will include the amount you paid for federal income tax. Your income tax rate will vary depending on your income level. The government takes anywhere from 10 percent to 35 percent of your income in taxes.
You can reduce the amount of income with exclusions and exemptions. These usually come right off the top of your gross income, which can move you into a lower tax bracket. You federal income tax form will outline some of the deductions that you can make, such as tax-exempt bonds, or employer paid health tax. Other deductions may include moving expenses, or alimony. Everyone is allowed a certain amount of income tax free. This is called your personal exemption. You can also fill out forms to claim exemptions for your spouse or children if you qualify. Charitable donations and medical expenses can also be deductible.
You must claim all of the income you made in a year. This can include your salary, capital gains from the sale of property, stock or investments. Slow growth capital gains are generally taxed lower than capital gains realized over a relatively short period
Remember do not celebrate a refund. Instead, you should adjust your withholding tax. If you are getting money back from the government, it means you paid too much in the first place. You are giving the taxman an interest free loan.