W-4’s, W-2’s, and Tax Returns

Financial Planning EarningSavings Spending Investing Tax Planning Retirement Planning Estate Planning

Q&A On what day of the year are income tax returns due to the United States federal government (also known as “tax day”)? April 15

Pay-as-you-go system Each pay period, a portion of your check goes toward your tax obligation Jan. 1April 15Dec. 30

Example: Results of Pay-As-You-Go $10,000Income 10%Tax Rate $1,000Amount Owed REFUNDOWE $1,000Amount owed $1,000Amount owed $1,200Amount paid $900Amount paid $200Refund$100Payment

How does your employer know how much money to take out? Based on how you filled out your W-4 form. Purpose of W-4: determine how much federal income tax will be taken out of your paycheck each pay period.

W-4 Form: If not exempt… Fill out allowances worksheet Allowances: reduce your taxable income ($3,400) As a teenager, you must put zero allowances The less allowance you claim, the more $$ taken out Allowances$ Taken Out (Taxes) Net PayRefund

Impact of Allowances

What do you need to complete your tax returns? Income W-2 Form(s) 1099 Form(s) Other tax deductible statements Tax forms or access to online forms

How much will I owe? 2010 Federal Income Tax Brackets 2009 Federal Income Tax Brackets

Federal Tax Return For a single person or married persons with no itemized deductions, complete Form 1040EZ

State Tax Return For a single person or married persons with no itemized deductions, complete Form WI-Z

Practice 1040EZ Prepare a 1040EZ federal tax return for Maria Hunt using the information below. Maria is single and claims only herself. Maria M. Hunt / 54 Center Street / San Francisco, CA Social security number: She wants $3 to go to the Presidential Election Campaign fund. Maria’s salary is $28,200, plus she earned interest of $155. No one else claims her as a dependent. Occupation: part-time engineer Maria had $3,660 in federal taxes withheld.

Practice WI-Z Prepare a WI-Z state tax return for Marta M. Hunt using the information below. Marta is single and claims only herself as an exemption. Social security number: Marta M. Hunt / 708 W. Milwaukee St./ Jefferson, WI She wants $1 to go to the State Election Campaign fund. Tax district is the City of Jefferson, County of Jefferson, School district number Maria’s salary is $44,978, plus she earned interest of $365. No one else claims her as a dependent. Marta paid $7,200 in rent. Heat was not included. Maria had $1,877 in state taxes withheld.

Assignment Complete a 1040EZ and WI-Z tax return for Sammy Dawson