How to Understand Your Tax Return in 2017
Why do you have to file my tax return every year?
The purpose of filing your tax return every year is to show that you, as a taxpayer, meet your legal obligations to pay the government.
What are the timeline for the filing?
The filing deadline for the regular tax return is April 15. The year of 2017 will be different because of two reasons. April 15, 2017 is Saturday, so the filing deadline is supposedly moved to the Monday of following week. However, Monday (April 17, 2017) is observed as Washington D.C. Emancipation Day. Therefore, the filing deadline for 2017 return is on April 18, 2017.
You have until midnight of April 18, 2017 to file your 2016 tax return. In some cases, However, if you believe you may owe the IRS any money for the year, you must make your payment (estimated numbers) before April 18, 2017. Otherwise, you will have to pay interest and penalty in additional to your original tax liability. In some cases, you can request for the extension of time to file your tax return using this link.
The Table below will show you the costs benefits between filing tax return yourself and filing with a Registered Tax Preparers:
| Your decision to go with: | Filing by Yourself | Filing with a Registered Preparer |
| 1. Tools used | Software (online / desktop version) | Tax Preparer’s software |
| 2. Cost | Varies (Free from IRS Website*) | Normally higher than compared to filing by yourself |
| 3. Time | Varies 1 – 4 hours | Usually less than 1 hour |
| 4. Tax Refund | Varies | Maximize your refund |
| 5. Tax Liability | Varies | Minimize your liability |
| 6. Support | Costly | Usually included with your fee |
Some of the following terms you need to understand when it comes to IRS Tax documents:
- Earned Income vs. Unearned Income:
- Gross Income
- Exemptions
- Standard Deduction
- Itemized Deductions
- W-2 Form (for Employees)
- 1099 Form (for Independent Contractors)
- Filing Status
- Single
- Married
- Filing Jointly
- Filing Separately
- Head of Household
Resources:
My recommendation for first time tax filers (means you’ve never filed a tax return before) is that:
- First, you go with your online or offline Tax Software to figure out how much tax refund you will receive or how much tax liability (payment to IRS) you will need to pay
- Then, you can confirm your tax figures with a local registered tax preparers (you may have to pay a fee for their service, but it’s worth every dollar you pay).
- If your income and filing status haven’t change for next year’s tax return, you may decide to prepare and file your tax return by your own.
*IRS Free Filing Software
For more information, please go to the IRS Website and watch the video below.
If you have an income below$64,000, you can use this free file software
If you have an income above $64,000, you can use the free file fillable forms here.
