Build Their Confidence For The Future
Using problem-solving, self-reflection, and interactive activities to practice their skills, students will come away with the ability and knowledge they need to handle a very grown-up task confidently on their own. As one teacher from Pekin CSD in Iowa says, Ive been wanting a better way to teach taxes since I started teaching eight years ago and Im so excited to use this in class.
Tax Basics: A Beginners Guide To Taxes
By FindLaw Staff | Reviewed by John Devendorf, Esq. | Last updated December 13, 2021
Congress, the legislative branch of the government, writes the Internal Revenue Code , also called the tax code. The tax code directs the collection of taxes, the enforcement of the federal tax rules, and the issuance of tax refunds, rebates, and credits. The Internal Revenue Service is the government agency within the U.S. Department of Treasury that is in charge of carrying out these functions.
Since everyone who makes over a certain amount must pay taxes, it’s important to get a general understanding of federal tax laws in the United States. For articles focused on more specific topics, see the index for FindLaw’s Tax Law section.
How Tax Credits Impact Your Income Tax
Tax credits and deductions are two separate things. Deductions subtract from your income, and you’re taxed on the balance. Tax credits, on the other hand, reduce the amount that you owe to the IRS.
You might have claimed all of the deductions you qualify for and still owe the IRS $1,000 in taxes. But you won’t owe the IRS anything if you also qualify for a $1,000 tax credit. The credit reduces, or can even erase, your tax debt.
Some credits are refundable. You might owe the IRS $1,000 when you complete your tax return, but maybe you’re eligible for a refundable tax credit worth $2,000. That credit would wipe out the $1,000 you owe, and the IRS would send you a check for the balance. That’s $1,000 in your pocket that you didn’t have before.
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Extension To File Your Tax Return
If you cant file your federal income tax return by the due date, you may be able to get a six-month extension from the Internal Revenue Service . This does not grant you more time to pay your taxes. To avoid possible penalties, estimate and pay the taxes you owe by the tax deadline of May 17, 2021.
What Software Do Tax Preparers Use
Thomson Reuters UltraTax CS is a leading professional tax preparation software that automates your entire business whether for individual tax preparation or business clients.
Filled with powerful time-saving tools and features, UltraTax CS gives preparers access to federal, state, and local tax programs including individual, corporate, partnership, estates and trusts, multi-state returns, and many others.
UltraTax CS also offers seamless integration with other Thomson Reuters solutions, including CS Professional Suite and Onvio Firm Management, connecting your entire practice and ensuring that youll never lose time doing a task manually.
From cloud computing to advanced data sharing and paperless processing, UltraTax CS meets all your tax workflow needs with a customizable, end-to-end solution.
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What Are The Deadlines For Filing Your Taxes
There are deadlines for filing your taxes that you must meet. Typically, Tax Day is April 15, meaning that’s the last day to e-file or mail your tax return. Monday, April 15, 2021, is when your 2020 taxes are due.
Sometimes April 15 falls on a weekend or on a holiday, so the deadline for filing your taxes is moved to the next business day. And the deadline for 2019 taxes was delayed substantially due to COVID-19, with 2019 taxes not due until .
There is no reason to wait for the deadline — the IRS will begin accepting returns for the 2020 tax year as early as January 27, 2021.
About The Comprehensive Tax Course
In this beginner tax preparer course, you will learn to prepare tax returns and research tax issues for most Form 1040 individual, non-business taxpayers plus the basics of Schedule C/self-employed tax returns.
- 4 Modules, 4 Chapters each
- No prerequisites required.
- California edition is CTEC Approved.
When you complete the ITS Comprehensive Tax Course, you will be qualified for employment or self-employment as a tax professional and ready to start earning money.
No prior tax or accounting experience or knowledge required.
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Are You Ready To Find A School That’s Aligned With Your Interests
Almost every adult needs to file their taxes and, thanks to the complexity of tax laws, people often turn to professional tax preparers to do the work for them. According to the Bureau of Labor Statistics, this career field is expected to grow by 2.9% through 2026. This growth means now is a great time to pursue a career as a tax preparer. Below you can learn more about the skills needed to become a tax preparer, how long it takes to get into the field, the credentials you should earn, and helpful tools and resources to help you along the way.
Best For Advanced: Advanced Tax Preparation By The National Tax Training School
National Tax Training School
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Learn how to prepare complex tax returns
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Access to a tax expert mentor for a year
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Job placement services arent provided
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Can take a year to complete the program
If you know how to prepare basic tax returns and want to continue to advance in your career, the Advanced Tax Preparation course by National Tax Training School is a great option. Youll learn how to provide a full suite of tax services , and Enrolled Agent exam prep, which is typically offered as a separate program, is included.
This online course is self-paced. Its possible to complete it in a couple of months, but it could take a year. In addition to online materials, youll be given a hard copy to use as a reference guide and youll be assigned a course mentor who can support you with tax-related issues for up to a year.
Upon graduation, youll earn a certificate identifying you as a Professional Tax Consultant. If you want to become an Enrolled Agent, youll be ready to sit for the exam upon graduation. Getting licensed as an EA can be a great way to accelerate your tax preparation career.
If you opt for this program, the tuition is $745 if paid in full in advance. Alternatively, you can make two equal installments of $380 for a total tuition of $760.
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How To Do Your Taxes In Canada
Whether youre a first-time filer, or someone whos been going to a tax preparer for years, you might be wondering if you can do your own taxes. You can, and its easier than you think.
Gather Tax Filing Information
Youll need to do this whether youre hiring a tax preparer or doing the tax filing yourself. The goal is to gather proof of income, expenses that might be tax-deductible or win you a tax credit, and evidence of taxes you already paid throughout the year. Our tax prep checklist has more guidance, but heres a short version of what to round up:
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Social Security numbers for yourself, as well as for your spouse and dependents, if any.
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W-2 form, which tells how much you earned in the past year and how much you already paid in taxes.
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1099 forms, which are a record that some entity or person not your employer gave or paid you money.
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Retirement account contributions.
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State and local taxes you paid.
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Educational expenses.
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Entering Tax Calculations On Your Tax Return
If you are using certified tax software, the software may use information you previously entered and ask you additional questions to calculate your net federal and your net provincial or territorial tax. The software will fill out the correct federal and provincial or territorial forms .
Sorry, that’s incorrect.
The tax credits you are entitled to claim reduce the taxes you owe on your income.
You use your total taxable income to calculate how much tax you might owe no matter how many employers you worked for during the year.
Sorry, that’s incorrect.
You multiply your taxable income by the tax rate that applies to determine how much tax you might owe.
You use your total taxable income to calculate how much tax you might owe no matter how many employers you worked for during the year.
That’s correct.
Answer: “How many employers you work for”
You use your total taxable income to calculate how much tax you might owe no matter how many employers you worked for during the year.
Sorry, that’s incorrect.
Tax rates determine how much tax you might owe on your income.
You use your total taxable income to calculate how much tax you might owe no matter how many employers you worked for during the year.
Below is an example of what the federal tax calculation looks like on the tax return:
Example
Is this form hard to read? Don’t worry, we will provide you with a link to the PDF version after this lesson.
Resources are available
- T1 Income tax package
G
No Matter How You File Block Has Your Back
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Adults Will Never Learn How To Do Taxes If Schools Dont Teach Them
The most commonly known fact about tax returns is their deadline, April 17, but its likely to slip the minds of even the most respectable adults. As Tax Day quickly approaches, many people find deciphering numbers and filing forms to be a hassle, but it doesnt have to be difficult.
If students could learn to file their own taxes in the classroom, they could be better prepared in their financial futures.
Learning new skills, no matter what they might be, certainly helps adolescent brain development, but not everything taught in school is necessary. For example, playing the recorder is a common activity in many elementary schools in the U.S.
Most of us don’t have fond memories of playing the recorder. Admit it, you never picked it up after your last elementary school music class session. Well, here’s the story behind the high-pitched musical instrument.
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Great Big Story is a video network dedicated to the untold, overlooked & flat-out amazing. Humans are capable of incredible things & we’re here to tell their stories. When a rocket lands in your backyard, you get in.
With so many different lines, boxes and pages, taxes can appear daunting to anyone, but this fear is overly dramaticized.
But at least everyone knows how to play the recorder, right?
The Deadline To Pay Your Income Taxes
The deadline to pay taxes, for those who earn enough to do so, can be confusing because the date you must pay does not always line up with the date that you must file.
Employed individuals have the same payment and file date: April 30 . Thats because their taxes usually get taken off at the source, on each paycheque, so their tax calculation is simpler.
Self-employed individuals must pay any taxes owed in a tax year by April 30, but they have until June 15th to file their return.
The CRA charges a fee for late filers5% of your balance owed plus an additional 1% for each month late .
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Best Overall: Surgent Income Tax School
Surgent Income Tax School
Why We Chose It: Tax preparation courses are available for professionals at all knowledge and experience levels at an affordable cost.
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Resources are available for beginning and experienced tax pros
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Costs are affordable
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Surgent has an excellent reputation
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Career services arent provided
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Can take up to 18 months to complete the program
Surgent was founded in 1985 and is a leading accounting, tax, and finance education provider. The company is well known for its continuing professional education and exam review programs . It also has an Income Tax School with more than 40 online tax training programs offered nationally.
The Surgent Income Tax School offers professional tax preparation courses for individuals at all career levels, including beginners and experienced tax professionals. This includes short, three-hour CPE seminars good for tax professionals needing to maintain their certifications. It also includes comprehensive training for beginners with a high school education and no experience who want to become tax professionals.
Costs vary depending on the courses, ranging from a low of $29 for a CPE course up to $1,497 for all five courses in its Chartered Tax Professional program, covering beginner to advanced tax concepts. Upon CTP program completion, youll have the knowledge and experience necessary to prepare for the Enrolled Agent exam.
You can expect it to take 12 to 18 months to complete the program.
What Are Allowable Deductions
The government allows the deduction of some types of expenses from a person’s adjusted gross income, or gross income minus adjustments. A person can exclude some income from taxation by using a standard deduction amount based on the taxpayer’s filing status or by itemizing certain types of expenses. Allowable itemized expenses can include mortgage interest, state and local taxes, charitable contributions, and medical expenses.
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Calculating Your Net Federal Tax
The next step is to calculate your non-refundable tax credits. You will then subtract your federal non-refundable tax credits from the total taxes you calculated on your income. The result of this calculation is your net federal tax.
Basic personal amount
The first federal non-refundable tax credit is the basic personal amount. The basic federal personal amount is $14,398 for the 2022 tax year. In general, anyone with a taxable income below this amount does not have to pay federal income tax.
Example: The basic personal amount
The federal taxes Giovanni calculated on his income will be completely eliminated, because he had taxable income of less than $14,398.
The non-refundable tax credit rate
Your non-refundable tax credits are also multiplied by a nonrefundable tax credit rate. This means that you do not apply the full value of your non-refundable tax credits against the taxes you owe on your income. A percentage, pre-determined by the government, lowers the taxes you owe on your income.
Test yourself
That’s correct.
Answer: “$3,000”
The tax calculated on Marias income will be reduced by a percentage of her non-refundable tax credits. This amount is calculated like this:
- $20,000 ×multiplied by 15% =equals $3,000
Sorry, that’s incorrect.
The tax calculated on Maria’s income will be reduced by a percentage of her non-refundable tax credits. This amount is calculated like this:
- $20,000 ×multiplied by 15% =equals $3,000
Using Tax Software To Enter Your Income
If you are using certified tax software to do your taxes, the software asks you questions about your income. Each software is different. Some may ask if you had certain types of income, what specific slips you have, or if you have any income not reported on a slip. You have to enter the amounts shown in the boxes of your slips, as well as information about any income not shown on a slip. The software adds up the amounts for the same income types and puts the total on the appropriate lines.
It is your responsibility to make sure that you review the information you have entered into the certified tax software before you submit your tax return to the CRA. For example, if you worked for two employers during the year, check that the sum of your employment income is as shown in the software.
D
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Watch For Your Income Documents To Arrive
You should receive forms about how much income youve earned from your employers and other income sources in January or February. If you are a full-time employee, you will receive a Form W-2 detailing your earnings, as well as which taxes were withheld. If you work freelance or on a contract, you may receive a Form 1099-NEC detailing what you earned. You may also receive documents showing dividends or interest earned on investments , or student loan interest youve paid . If youre a college student , youll receive a Form 1098-T that shows how much you paid in tuition, as well as any amounts you received from grants or fellowships, to help you figure out deductions and credits related to education expenses.
