Monday, February 4, 2008

An Intro to Taxes

It's my first year doing them for myself. I'm finished, with a few obscure questions pending, and we're about halfway through Wal's, because of when things came in.

This will be a two or three part series intended to be a sort of introduction to those starting out. I probably will not cover much that does not apply to my situation, and I don't have any sort of actual qualifications, so you had better be doing your own research, too.


First, I asked for Turbo Tax as a gift, which should reveal to you two things:

1) What a complete dork I am
2) How excited I am to do my taxes for the first time
3) That I am, as previously stated, a total noob.

That being said:

Taxes, Part I

This part is easy if you subscribe to the Identity Theft Binder System. It's actually not bad in general, once you nail down what it is you're looking for, and stop confusing all the form numbers. Here is what Wal, Number One, and I needed. (Other people may need other forms for strange situations, but these are the only ones I've had to deal with so far.)

1040: Your main tax return form
Do I need it? Um, yes.
How do I get it? In the mail from the IRS, downloaded, or from tax prep software.


1040EZ and 1040A:
Do I need it? They takes the place of the 1040. You can do it if you meet the criteria (see Pub 17, p. 8). For the 1040EZ, the criteria include under $100,000, income only from wages, no dependents. It is, as named, easier than the basic 1040. The 1040A is still a break from the full 1040. It allows you to have interest and dividends, etc, but you can't be itemizing deductions.
I let TurboTax decide for us.

W-2: From your employer. Summarizes the federal and state taxes you paid over the last year. How did they know how much to take out? When you started you filled out a form about your tax filing status and the deductions you could claim, etc.
Do I need it? Yes, if you have a job and make $8750 (single, under 65). But you should file even if below, because you'll probably get a refund.
How to get it: This you've got to get from Payroll or HR at work. It might be mailed to you, or given out when you get your normal paychecks.

1099-INT, 1099-DIV: These are separate forms, but they're probably coming from the same place. (Hint: "INT" for interest, "DIV" for dividends)
Do I need it? If you earned interest or dividends of basically any kind, like from savings accounts or investments.
How to get it: Bank of America's slow on the uptake - you've still got to wait for them to mail the stuff. Fidelity and Vanguard, among others, send them by mail but also allow you to see exactly the same things when you access your account online. (And you should be accessing your account online...)

1099-B: ("B" for brokerage, or some such)
Do I need it? If you sold stocks/funds.
How to get it: From the investment company / brokerage you use, online or wait for it by snailmail.

1098-E: Student loan interest.
Do I need it? If you paid interest on your student loans this year.
How to get it: From whoever you paid it to, by mail or online if they are set up for it.

1098-T: Something to do with higher education tution.
Do I need it? If you paid tution this year, I think. I'm still a little unclear on this crap.
How do I get it? From your college.

5498:
Do I need it? If you have a traditional IRA or Roth IRA (...which you should).
How do I get it? Online or by mail from whoever you have your IRA through (Fidelity? Vanguard? T.Rowe Price?)

4868: To get an automatic extension. Haven't had to actually use that one yet.


That's all we've really had to contend with.


...What do you guys want to see for Part 2?
The questions I've come across so far and had to find answers?
Interesting things from reading the 298-page Publication 17?
Thoughts on Turbo tax?
Adventures in e-filing? (or FreeFile, I guess)

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