5.2
What’s a tax return?
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Simply put, this is a set of forms to help
you calculate your tax obligation.
Note:
Not everyone must file a tax return. If you make less than a
certain amount, you are not required to file.
Tax notes continued…
Things you might want to know
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Filing a tax return is the only way to have
funds returned to you if you either owe no
tax, or too much was withheld from your
income.
Sometimes what was withheld wasn’t
enough to cover your taxes, in which case
you must send the remaining amount to the
government.
You alone are responsible for the accuracy
of your return, no matter how you file your
taxes.
Sources of information
for your tax return:
FORM W-2
This comes from your employer.
It is a summary of earnings and
withholdings for the year.
You should have one for every job
you held throughout the year (your
employer also sends a copy to the
IRS).
The government requires a copy of
your W-2 when you file your taxes as
well.
Not reporting your earnings will earn
you a visit from the IRS.
Refer to pg. 164 for an example W-2
Sources of information
for your tax return:
FORM 1099-INT
You get this for any interest you
earned on money in the bank.
The bank sends a copy to the IRS
and to you.
Types of Income Tax
Forms:
1040 and 1040A
There are 3 types of forms most often
used when filing taxes, all of which
are available online, or at a post
office or library.
The 1040 and 1040A forms allow
you to itemize deductions to reduce
the amount you owe.
This is helpful if you:
Own a home
Have children
Invest in the stock market
Run a business
Types of Income Tax
Forms:
1040EZ
To use the 1040 EZ you must:
 be single or married and filing
together
Under the age of 65
Not blind
Have income of less than $100,000
Earned less than $1500 in interest
Have no income other than, wages,
interest, tips, scholarships or
unemployment compensation
Refer to pg. 167 for a sample
1040EZ.
Completing a 1040EZ
Step 1: Identify yourself
This includes things like your name
and social security number.
Completing a 1040EZ
Step 2: Identify your
income
This includes:
 total wages/salaries/tips (usually found
on your W-2). Note: if you held more than
one job, you will need to add your
earnings from all your jobs.
 taxable interest income (this comes
from your 1099-INT)
 unemployment compensation (only if
you filed, otherwise leave blank)
What do you get when you add these 3
together? This:
adjusted gross income (this is what you
get when you add lines 1, 2, and 3
together). It’s recorded on line 4.

Next up? Deductions.
Completing a 1040EZ
continued:
Step 3: Deductions
You may only claim yourself if no one
else can claim you (like a parent or
guardian).
Note: As a young person, there is
typically someone else claiming you
(since they are supporting you by
providing food ,shelter, etc.)
If you cannot claim yourself,
complete the worksheet on the back
of the form, there may still be a
limited amount you can deduct, even
if someone else is claiming you.
If no one can claim you, you qualify
for a standard deduction (listed on
the form based on how you are
filing).
Completing a 1040EZ
continued:
Step 4: Your taxable
income
When you subtract line 5 (your
deductions) from line 4 (your
adjusted gross income), you get line
6:
Your taxable income.
This is the figure used to determine
your taxes.
Refer to pg. 167 for a sample of
1040EZ
Completing a 1040EZ
continued:
Step 5: Payments and Tax
Let’s start with the federal income tax
withheld.
On line 7 you will enter the amount of
tax that was already withheld by your
employer (this is on your W-2, in box
2).
Don’t forget, if you had more than
one job, you must add the amounts
withheld from ALL W-2s to calculate
an accurate total.
Next comes earned income credit.
If you had a really low income, you
may be eligible for another tax credit
(which is treated as if it were a tax
payment).
On line 8 you add what was already
withheld from your pay along with
any income credits. This tells you the
taxes you have already paid.
Completing a 1040EZ
continued:
Step 6: Tax
Each form contains a table with the
amount of tax you owe for the year.
Remember, your taxable income is
listed on line 6. You must find where
your taxable income falls in that
table, looking at the number that
pertains to you (single or married
filing jointly).
A sample of this tax table can be
found on page 168.
Getting a refund, or paying Uncle Sam?
Since taxes are withheld from
your paycheck throughout the
year, most of your taxes have
probably been paid.
 If more was withheld than
necessary, you get that money
back
 Write the amount on line 11a.

Note:
Refunds can be issued
electronically, and
deposited directly into your
checking account.
Refund
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If you owe more than has
already been withheld, you
will need to pay the rest of
what is owed.
Write the amount on line 12.
Note:
Don’t forget to sign your
return, whether you are
receiving a refund or making a
payment!
Paying Uncle Sam
(ie. Amount You Owe)
Don’t forget to sign your return!
Checking For Accuracy
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It’s important to remember that submitting a
tax return with a mistake can cost YOU.
The IRS can issue a penalty to pay, or you
could receive a lower refund than you are
owed.
You may pay the IRS via check or credit
card, although credit payments cost a fee of
about 2.5%
Deadline for paying taxes each year is April
15th!
Self Employment Tax
1040 required
When you don’t have an employer
withholding taxes throughout the
year, you must use another
method to ensure taxes are still
being paid.
Paying on a quarterly basis
when you work for yourself, you pay
your estimated taxes every 3 months.
• this helps business owners avoid
taxes and penalties
•
Schedule C (1040)
Self employed business owners
must file this (also known as C-EZ,
Schedule C, or 1040)
• SEBOs still pay income tax, social
security, and Medicare
•
Electronic Filing

There are advantages to filing online:
You get your refund faster
2) The software only costs a small fee to
file (Turbotax and Taxcut are examples)
3) Helps organize your information
Caution:
You may qualify for a tax refund loan
1)