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Also from NZ. Is 'file taxes' a synonym for a post-facto 'tax return' when the government overcharges, due to charitable donations etc? Otherwise I can't imagin

Also from NZ. Is 'file taxes' a synonym for a post-facto 'tax return' when the government overcharges, due to charitable donations etc? Otherwise I can't imagine any reason why I as an NZ employee would ever need to consciously think about _paying_ tax :)

moftz 8y ago
Yes, in the US, the default is to have part of your paycheck withheld for taxes. Sometime in January, you get a total of how much you were paid last year and how much federal/state income tax you paid. You fill out a form either using software or paper with that information. There is a standard deduction which is several thousand dollars you can subtract from your pretax income or you can itemize your deductions which is what you may want to do if you have children, just bought a home, made a lot of donations, or have a more complicated tax situation than just a single person renting an apartment with zero major assets. Most people will take the standard deduction because it's more than what they would get from an itemized deduction. You add up all the deduction(s), subtract that from your pre-tax income, then run the numbers again to see how much tax you should have paid. If the number is less than what you paid throughout the year, the govt cuts you a check otherwise you owe them money. If you planned to just take the standard deduction and have a simple tax situation, you could probably get away with not doing anything. You can fine tune your withholding number for your paycheck to minimize the amount they take out or you can increase the withholding if, for example, you know you are going to have a child lose their dependent status that year. I do the standard deduction and withholding. I got about $2000 back from the govt in overpaid taxes this year. I probably woulnd't have saved that money if I had fine tuned my withholding and was getting the extra $77 on each paycheck.

moftz 8y ago

Yes, in the US, the default is to have part of your paycheck withheld for taxes. Sometime in January, you get a total of how much you were paid last year and how much federal/state income tax you paid. You fill out a form either using software or paper with that information. There is a standard deduction which is several thousand dollars you can subtract from your pretax income or you can itemize your deductions which is what you may want to do if you have children, just bought a home, made a lot of donations, or have a more complicated tax situation than just a single person renting an apartment with zero major assets. Most people will take the standard deduction because it's more than what they would get from an itemized deduction. You add up all the deduction(s), subtract that from your pre-tax income, then run the numbers again to see how much tax you should have paid. If the number is less than what you paid throughout the year, the govt cuts you a check otherwise you owe them money. If you planned to just take the standard deduction and have a simple tax situation, you could probably get away with not doing anything. You can fine tune your withholding number for your paycheck to minimize the amount they take out or you can increase the withholding if, for example, you know you are going to have a child lose their dependent status that year. I do the standard deduction and withholding. I got about $2000 back from the govt in overpaid taxes this year. I probably woulnd't have saved that money if I had fine tuned my withholding and was getting the extra $77 on each paycheck.