| The tax levied on an individual's or corporation's | | | | If you have paid interest on mortgage or real |
| income is known as income tax, which is a direct | | | | estate taxes, you will be mailed a 1098 along with |
| tax. Individuals are taxed on their total income, | | | | this information. These forms come in triplicate, |
| taking into account the standard deductions. | | | | so send the original to the IRS, and keep the |
| Corporations or businesses are taxed on their net | | | | copies carefully. |
| income, which is the difference between gross | | | | The IRS e-file program makes it easy to file your |
| receipts and expenditure. Companies would have | | | | taxes online. Before you do so, get a PIN number. |
| to pay corporate or corporation tax. Tax is | | | | For this you will need to give your birth date, |
| charged on wages, business income and capital | | | | social security number, and information from your |
| gains. | | | | previous year's tax return. |
| Anyone who works in the United States has to | | | | A single person would file an individual tax return. |
| file income tax returns and pay federal income | | | | Those who are married can file jointly or as |
| tax every year by the 15th of April. If you | | | | individuals. There are many rules for separated, |
| cannot do so then you can apply for an extension | | | | divorced or couples living together. Do go through |
| from the IRS by filing Form 4868. You must then | | | | them carefully. Also look closely at the rules for |
| file within four months, by August 15th. | | | | dependents. Do keep in mind that the social |
| The two major types of tax systems are flat | | | | security number of the dependent has to be put |
| rate taxes and progressive taxes. Flat tax rate is | | | | on the return, and child support payments are not |
| when all earnings are charged at the same rate. | | | | deductible. |
| Progressive taxes are calculated differentially, | | | | After filing, if you owe taxes, pay before the |
| based on how much has been earned. For | | | | deadline, or you will face penalties. You may also |
| example every $10,000 will be charged higher in | | | | be owed a refund if you have overpaid your |
| the beginning and the following ones would be | | | | taxes. These could be paid directly or by check. |
| charged at progressively lower rates. Deductions | | | | Make sure to include bank account information |
| help individuals and companies pay a lower amount | | | | when you are filing the form. |
| in taxes. | | | | With your income tax returns, you can claim |
| U.S. residents have to file Form 1040. Nonresident | | | | standard deductions or itemized deductions. These |
| Americans will have to file Form 1040 NR. If you | | | | are for mortgage, student loans, some specific |
| are exempt from taxes, you then file Form 8843. | | | | expensive medical treatments, charities and |
| The most essential documents you need are your | | | | business expenses. The originals of 1099 forms |
| visa, passport, and social security number or TIN | | | | and documentation of these deductions must be |
| (Tax Identification Number). | | | | sent to the IRS. |
| As an employee of a firm you will file the W-2 | | | | You can file the returns yourself or get a |
| form, while the self-employed will need to file | | | | consultant to help you. The IRS also helps filing of |
| Form 1099. If you generate income from | | | | your returns. Call the IRS customer service |
| investments, dividends, royalties or rental income | | | | representatives toll-free at 1-800-829-1040. |
| you will also need to file the 1099 form. | | | | |