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With deadlines for submitting taxes rapidly approaching, the rigours of the US tax system are starting to sound onerous. Still, no matter how experienced you might be as a taxpayer, knowing some basics like income thresholds, and deadlines can help you save time and money.
However, you should not worry because this guide will help you uncomplicate tax filing and make it more manageable. Are you ready to face your taxes this year?
The following is a blog post that will provide all the information so that you may handle your tax payments confidently here in the United States. Whether looking to be guided on how to file your taxes or looking for clarity regarding the process, this all-in-one guide has got your back.
For most individuals in the United States, tax season is the most stressful time of the year; however, with some preparation and good information, things can go pretty smoothly. The first thing to be informed about is the deadlines to ensure an efficient filing process. But, careful planning keeps you, miles ahead in the race. Missing the important dates might cost one in penalties and hence more stress. The dates will help you avoid the last-minute struggles and extra hassles as an employee, freelancer, or business owner.
State and federal tax deadlines usually coincide, but depending on where you live, this can sometimes not be the same. Key tax dates for 2024 include the following:
Below are the due dates for the federal taxes:
September 16, 2024
The third quarterly tax payment for 2024 is due on September 16, 2024. To minimise penalties and interest, you must pay as soon as possible if you missed the due date.
October 15, 2024
The last day to file your federal tax return for 2023 is October 15, 2024, if you requested an extension.
January 15, 2025
January 15, 2025, is the deadline for the final estimated payment, or the fourth quarter, for 2024.
For a complete list of all important federal tax deadlines and dates, please check out this detailed guide from TurboTax
State Tax Due Dates
Due dates for the state taxes include:
October 15, 2024
The deadline will probably be in October if your state enables date extensions.
For more precise information, please refer to IRS Publication 509.
You have the option to ask for an extension to file if you are unable to submit your tax return by the deadline. When you ask for a filing extension, you must pay any taxes that are due by the original deadline to avoid penalties and interest.
Your tax papers can be extended for filing taxes by filing IRS Form 4868, your new filing date changes or extends to October 15, 2024. This filing date only is extended by this action; the payment deadline has not changed.
Most states adhere to guidelines that are comparable to the federal extent but requirements may vary from one state to another. Certain states require a separate application, while others automatically grant a state extension upon filing a federal extension form.
For most people, filing taxes is a dull, lengthy process. This is the reason why many individuals have opted not to file returns. It is your responsibility to ensure that each year your taxes are filed, that is part of being a responsible citizen.
You may additionally benefit from filing taxes. These are some of the advantages of filing a tax return:
You can generally amend your return to claim a credit or refund for a specific tax year on these 2 dates:
The maximum refund or credit you can receive is the total amount you paid in the three years before you filed your claim, added to any extra time you were required to file your return.
You are refunded or credited for only up to the amount paid in the two years before filing your claim.
This window of time may be referred to as the Refund Statute Expiration Date, or RSED. The date on which you file your claim determines what credit or refund you might be eligible for.
Interest paid on business, student, and home loans is generally deductible in annual taxes, reducing your taxable income for the year. Each of these deductions has certain criteria that need to be met.
You may be eligible to claim the interest paid on business expenses from your taxes if you use a credit card or personal loan to pay business expenses in addition to your expenses.
If you can demonstrate an appropriate explanation for the failure and that it wasn’t the result of intentional negligence, the IRS may reduce your penalties for submitting and paying after the deadline. Paying as soon as you can could prove that your original late payment was the result of justified circumstances rather than wilful carelessness. The basic deadlines for paying taxes and filing returns are subject to a few exceptions, including:
In such circumstances, the IRS has the power to extend the deadlines for filing and payment.
Except for individuals who make less than a specific amount in a calendar year, all citizens and permanent residents who work in the United States are required to file their income tax returns. The taxation body may charge the taxpayers a penalty if they have a responsibility to file a return and neglect to do so. In addition, if they intentionally neglect to file a return, they may face further fines or even a criminal case.
The amount that necessitates one to file under the various filling statuses is determined by factors which include age, source of income, etc. There are five categories in which one can file:
If a taxpayer under 65 has a gross income of $19,400 or more, they are required to file their tax return. You have to submit a return if your total annual earnings are $21,150 or more when you are 65 years of age or older.
An individual under 65 years old, without a marriage, divorce, or legal separation, whose gross income exceeds $12,950, is required to file a tax return. For individuals 65 years of age or older, filing a tax return requires a yearly income of at least $14,700.
A person under 65 years, both spouses and whose gross income is $25,900 or more must file a return. In case your gross income is $27,300 or more and you are aged 65 years or over then one spouse, must file a return.
Married persons who choose to file their separate tax returns require their gross income to be at least $5, regardless of age.
An income tax return must be filed if you are under 65 and your total yearly earnings exceed $25,900. The minimum annual earnings required to submit a return if you are 65 years of age or older is $27,300.
You are self-employed if you meet any of the following requirements:
In general, if you are self-employed, you have to pay income tax as well as the self-employment tax. The SE tax is composed of Social Security and Medicare taxes paid out by self-employed people. Any self-employed individual must file a yearly return and make quarterly estimated tax payments if their net earnings are $400 or more.
If someone is claimed as a dependent, they may still need to file a return. This is based on their gross income, which consists of:
The income that you’ve made in exchange for work i.e. salaries & wages, tips or professional fees and receipts of various sorts can be included in earned income.
This category includes income from capital gains or foreign exchange profits and tax deferral on ordinary savings. Unearned income also includes distributions of interest, dividends, capital gains and other unearned income from the trust to a beneficiary.
Parents or guardians must file the return for dependents who need to fill out a tax form but can’t do it alone. For more detailed information refer to the official website of the United States Government
Normally, an individual filing status for tax purposes depends on the marital status of a taxpayer as of December 31st at year-end.
To determine the correct filling status, consider your marital status, dependents, etc.
This includes single or divorced legal individual
Comprising Married couples that file the taxes jointly
It includes Married couples who file taxes separately.
It comprises Unmarried with a qualifying dependent individual
The category of filing status applies to only those who are under the age of 65 and whose spouse died in past two years with a dependent child.
The tax brackets and deductions you can claim are directly influenced by your filing status:
Any money deducted from your tax liability is called a credit. This may result in higher refunds or a smaller tax bill. An amount that is deducted from your salary at the time of filing to prevent paying taxes on it is called a deduction. Deductions reduce your taxable income.
Some common deductions that can lower your taxable income consist of:
Whether you opt to itemize or use the standard deduction, you can subtract the following expenses:
Tax credits can help lower your tax bill. Some of the popular tax credits are explained as
Earned Income Tax Credit (EITC) This tax relief is intended for low- to moderate-income families. Credit could reduce your tax bill and lead to a larger refund if you qualify.
This can mean substantial tax benefits for families with eligible children via the Child Tax Credit. Your dependent must qualify to be entitled to Child Tax Credit (CTC) and fall into the following categories:
A dependent may be your son, daughter, stepchild, foster kid who qualifies, brother, sister, stepbrother, stepsister, or half-brother or half-sister.
American Opportunity Tax Credit (AOTC) is a tax credit for students that meets certain criteria — including the first four years of higher education. To qualify for AOTC, the student must meet all of the requirements below:
To need more information about American Opportunity Credit (AOTC) please visit the official website of the IRS.
If you are an Alien resident or a U.S. citizen, the procedure for submission of income tax return/estate and gift tax returns/ payment estimated taxes must be followed by either in the country i.e., outside USA also supported among other provisions as specified under Internal Revenue Code section 911 -no taxation on worldwide base.
Any person who is not a citizen or national of the United States is considered an alien. An alien who has neither passed both the substantial presence and green card tests is a non-resident alien. You have to file a return if you identify with any of the following:
US Citizens Living Abroad Have the Following Tax Responsibilities:
It is important to take immediate action if you are unable to pay your taxes to prevent fines and interest. Some of the steps to take if you can’t pay your taxes are:
An agreement with the IRS to repay your tax debt in instalments over time is called a payment plan. If you have full faith in having your whole charges satisfied within the all-inclusive period, you should ask for a payment plan.
Payment methods vary by tax type, so check with the vendor to find out what options you have based on your situation. The alternatives for payment are as follows:
To learn more about it, refer to IRS payment plans
Filing your taxes can be a very stressful time. Reducing these stresses is knowing a few of the important deadlines, what deductions or credits you could have and how to utilize key resources that could ease your walk through the tax process.
The Accounting Farm has handled even the most intricate tax situations with accuracy and care, having over 12 years of experience in tax preparation. Our experts work to ensure that all of your tax needs are efficiently met, whether it’s personal or business taxes. Please contact us for personalized tax solutions and trusted support. Let us guide you with confidence through the complexities of tax laws.