While we get to answer this one particular question, we always come across 10 others. From “What are tax refunds” and “Why do we need to file taxes” to “How long does it take to get my refunds.”
IRS (Internal Revenue Services) is the world’s largest financial institution responsible for collecting taxes and administering the Internal Revenue Code. There are also forty-three states that require their residents to file taxes and forty-seven states that impose a tax on the income of corporations.
Everyone who earns income above the threshold is required to file federal taxes and depending on where you live, work, and do business, you might need to file state or even multiple state taxes.
Tax law changes and updates are meticulously studied and interpreted by tax professionals. They are often tricky, but very important. Then, starting January 15th, tax filing is in full swing.
1. What are Tax Refunds?
A Tax Refund is your money, it is any extra money that has been paid to the federal and/or state government throughout the tax year along with credits you may qualify for.
Most countries have some sort of tax system in order to pay for public, common agreed upon national needs, and government functions. The amount of taxes you owe is based on your filing status, income, credits, and deductions available.
Employers ask employees to fill out a W4. They then use that to calculate and withhold income tax from their employee’s paycheck, pay it to the IRS on their behalf, and issue employees a W2. The W2 is the summary/breakdown of income and taxes withheld throughout the year. 1099s may also be issued if you are an independent contractor or have other income. If not enough taxes were withheld, you end up owing taxes during the tax filing season. When you overpay taxes throughout the year and/or qualify for certain credits and deductions you receive a tax refund.
2. Why should I file taxes?
If you paid the right amount of taxes throughout the year, that’s genius, you won’t owe anything!!! However, many changes in the tax laws and new credits may provide you with a refund. It is recommended that you review the laws on a yearly basis or consult a tax professional as they are constantly changing. Tax rules and regulations often undergo changes and new credits are introduced constantly. If you file incorrectly, you might be missing out on a hefty refund. If you file incorrectly or don’t file your taxes at all you may be fined, penalized, and charged interest. Ultimately, whether or not tax is owed, not filing could have serious consequences.
The IRS has strict guidelines that determine whether or not you need to file and what credits you may qualify for. These guidelines are based on many factors such as the amount and type of income along with filing status, residency, and other factors.
eTax Services offers absolutely free estimates.
3. What is the Tax Filing Process?
First, gather your yearly income and deductions papers (W2s and 1099s, 1098s etc.,) and any additional documents that may be necessary (social security cards, birth certificates and proof of residency for dependent children.) You may want to contact or visit etaxservices.net for detailed list.
Tax applications can be filed electronically or you may choose to paper mail them. Various forms are available and needed based on your tax filing status, deductions, and the credits you may qualify for. The following are some common Federal Tax Forms along with who can file them:
- Form 1040 is the main one: It is the standard form that is used to file Individual Income Tax Returns for the federal government. There are various supplementary forms to this that people need to file based on credits, deductions, filing status, and other details that your tax consultant will guide you with. (i.e. Sch. 1, Sch. A, Sch. B, Sch. C, Sch D, etc,.)
- Form 1065 is a corporate tax form for those who are in a partnership model business
- Form 1120 series is for various types of Corporations listed under the business entities. (For information on the types of business entities, refer to our blog here)
- Form 940 and 941 are used for annual and quarterly federal tax returns
- Form 1040X is used for amendments or any changes needed to previous income tax returns as guided by IRS
- State tax forms vary by state
4. How long does it take to File?
Once our eTax expert inputs all the information, voila! You are done! (the interview process takes fifteen through forty-five minutes although some require additional time). Then you can send payment(s), schedule a payment plan, or wait for your refund(s).
Note: Bringing your previously filed tax returns can help your tax explain any changes that may occur.
5. How long does it take to receive the Refunds?
This time period depends on your mode of filing. If you opt for e-filing, it usually takes less than 21 days for you to receive the refund amounts in the bank account you provided during tax filing. It takes an additional week if you choose to receive the check mailed to your home address. (Paper mailed returns may take approximately 6-8 weeks.)
If you fail to receive the said amount in the stipulated time, you may connect with your tax professional, or click on where’s my refund link found on the government websites.
6. What are the reasons for the delays?
Reasons for delays can be due to incomplete returns, improper calculations, certain credits, or additional verification needed. You will receive correspondence requesting additional documents or explaining the delay, in the form of a letter, or notice from the IRS. Debt, taxes due for prior years, or past-due child support, etc., may result in recalculation and adjustments.
It is always advisable to connect with eTax Services for a premium tax consultation, guidance with audits, and replying/dealing with the IRS correspondence.
Just Sit-back, Relax, and let eTax get you the max back, main office in the city of Anaheim is open year-round for all the tax needs.
7. When is the last date for Tax Filing?
Tax Day U.S.A is usually April 15th.
Note: Special rules apply if it falls on a weekend, local holidays or major events.
If you need an extension for more time to gather documents and deductions, you may file Form 4868. This form usually gives you six more months, making October 15 your new deadline. However, interest will still accumulate.
eTax Services helps lower your tax liability and gets you the maximum refunds!!!. For a free Estimate schedule an appointment today!
Our main office in the City of Anaheim offers virtual tax filing and in-person appointments year-round. We don’t nt get lost, we are always available for all your tax needs!!!