Filing for Federal and State Income Taxes

Taxes are an important component of a functioning society. Without taxes in the United States, hospitals, schools, roads, bridges, libraries, fire departments, courts, and many other services would not be available to the country’s residents. The Internal Revenue Service (IRS) collects a portion of earnings based on how much income is received. Traditionally, “tax day” is April 15 of every year; however, in 2011, a three-day extension was granted till Monday, April 18 due to Emancipation Day, a holiday celebrated in Washington, D.C. that recognizes the District’s freeing of slaves.

It is important to understand requirements for filing income tax returns. Depending upon age and circumstance, not everyone is required to do so. Investopedia displays a simple income chart that helps clarify the process.

 

Federal Income Tax

The IRS provides many resources on its website to assist taxpayers of all types—from those who submit on an individual basis to those who employ others in small business settings.

 

To Do or Not to Do Your Own Taxes: Useful Articles

Should you take care of figuring out your own taxes each year? Jeff Schnepper of MSN Money provides some thought on both sides of this decision. If you choose to invest the time, discover some useful tips by Dan Caplinger on The Motley Fool website, as well as a host of links to other tax preparation and advice articles. The site fivecentnickel.com encourages individuals to tackle their own taxes, arguing that there’s no better way to get an idea of how tax burdens can be minimized. Plenty of software is available to streamline taxes using the computer. Check out a review by About.com that suggests which program may best suit your needs, depending on your particular employment or circumstance. Below are some more helpful articles.

 

State Income Tax

Most of the fifty states, as well as the District of Columbia, require their residents to pay a state income tax, and rates vary by state. States are not allowed to tax income from federal bonds, and most do not tax Social Security monies or interest income. Two states, New Hampshire and Tennessee, are distinct in that they do not tax regular income, but instead only tax dividends and interest income. The seven states that impose no income tax whatsoever are:

  • Alaska
  • Florida
  • Nevada
  • South Dakota
  • Texas
  • Washington
  • Wyoming

Provided for your convenience are links for each state’s tax information, including online and printable forms.