A Young Man’s Guide to Doing His Taxes

by Brett & Kate McKay on February 29, 2012 · 48 comments

in Money & Career

Quick Trivia: Until 1955, Tax Day was on March 15th.

This series is brought to you by TurboTax Federal Free Edition. What’s this?

Growing up, I associated “doing your taxes” with being a grown man. Whenever tax season rolled around, I’d see my dad sitting at the dining room table on weekends, hunched over a coffee-stained 1040 instruction book made out of its distinctively cheap pulp, figuring out how much his and my mom’s adjusted gross income would be for the year. The charts, tables, and worksheets in the 1040 instruction book made figuring out your taxes seem like some sort of exercise in esoteric astrology that only the initiated could understand.

Being the dork that I was, I couldn’t wait until I could fill out my own taxes. Fast forward to high school and I got my first real job busing tables at Chili’s. The money was good, and I had my share of all the free Chicken Crispers I wanted.  When tax season rolled around, I asked my dad if he could initiate me into the secret teachings of the 1040 form and accompanying instruction book. I remember going through the worksheets and filling out the different lines with pencil first, and then having my mom double check my calculations, just like dad did.  When I signed my name at the bottom of the form declaring that the numbers I reported were correct, I felt like I was taking a step into manhood.

Yeah, totally geeky. I know.

I also remember thinking, “Doing your taxes is actually pretty easy. Why do people gripe about it so much?”

Well, now that I’m an adult with a home and other assets, I can understand why people gripe about filing taxes. They’re a pain. The more complicated your financial life gets, the more complicated your taxes become. Or as the late, great Notorious B.I.G stated so eloquently, “Mo Money, Mo Problems.

I’ve completely lost the childhood mystique of “doing your taxes.” Instead, whenever April the 15th rolls around, I feel more and more like Ron Swanson from Parks and Recreation:

But when you’re young and just starting out in life, filing your taxes is simple. So simple, in fact, that there really isn’t an excuse for a young man not to take on this adult responsibility.

Yet in the past few years I’ve noticed a growing number of adult men whose dads still do their taxes for them. Seriously. I know guys in their late 20s and early 30s who’ve never filed their own taxes because their parents do it for them. Of course, this observation is completely anecdotal, but I’ve talked to other people about this, and they’ve seen the same thing: grown men who don’t know how to do their own taxes.

So to help those young men who have never filed their own income taxes before, I offer this beginner’s guide to help them ease into this responsibility. This post covers the bare essentials. The U.S. Tax Code is an amazingly complicated labyrinth of regulations. Tomes as thick as telephone books are written to help people navigate it. For the purpose of this post, I’m assuming you’re young, just starting your career and family, and make all your income from wages. We’ll save the intricacies of taxes on capital gains and losses for another day.

Before that day comes, perhaps both political parties will join hands and reform the tax code. And maybe one day I’ll don a pair of skinny jeans.

Basic Tax Lingo You Need to Know

Crap. I forgot how marginal tax rates work again.

One of the most intimidating things about doing your taxes is the tax jargon. Below I hit on some of the basic terms you’ll need to know to understand how income taxes work.

Witholding Allowances. You’ve probably noticed that when you get your paycheck you don’t actually get all the money you earned. Your employer subtracts, or withholds, taxes from your paycheck and pays the IRS the taxes you owe on your income.

You can control how much or how little your employer withholds from your paycheck using a Form W-4. A W-4 helps you determine your withholding allowances which tell your employer how much or how little money they should subtract from your paycheck for taxes. The more witholding allowances you have, the less income tax your employer withholds; fewer allowances and they withhold more. There are pros and cons for having more or less withholding exemptions. Maybe we’ll tackle them in a future post.

Adjusted gross income and taxable income.When you pay your taxes, you don’t actually pay taxes on the full amount you made during the year. Your adjusted gross income is your income after you subtract certain deductions like IRA contributions or payment on student loan interest. Taxable income is your income after you subtract the exemptions and itemized deductions (see below) that you’re eligible for from your adjusted gross income.

Tax bracket. In our graduated income tax system, the amount you pay in income taxes increases as you earn more money. The IRS has divided income levels into several income ranges called tax brackets. Tax rates are assigned to each bracket.

Here are the federal tax brackets for 2011:

Tax Bracket Married Filing Jointly Single
10% Bracket $0 – $17,000 $0 – $8,500
15% Bracket $17,001 – $69,000 $8,501 – $34,500
25% Bracket $69,001 – $139,350 $34,501 – $83,600
28% Bracket $139,351 – $212,300 $83,601 – $174,400
33% Bracket $212,301 – $379,150 $174,401 – $379,150
35% Bracket Over $379,150 Over $379,150

So, if you’re single and made $34,000 in 2011, you fall within the 15% tax bracket. All you need to do now is multiple .15 by $34,000 to get what you owe in taxes and then send a check for that amount to the IRS, right?

Well, no. There’s a catch. Not all of your $34,000 is taxed at that 15% rate. That 15% is what’s known in the business as your…

Marginal tax rate. I’ll be honest. It took me awhile to wrap my mind around the concept of the marginal tax rate. I always figured that if you fall in the 15% tax bracket, you pay 15% on all your income. It’s a common misconception that many people have.

A concise definition of your marginal tax rate is “the rate on the last dollar of income earned.” Okay, what does that mean? I think it’s easier to understand the marginal tax rate when you see it in action. Let’s again say you earned $34,000 in 2011 and are single. Here’s how the marginal tax rate would work:

  • The first $8,500 of your $34,000 will be taxed at 10%.
  • The remaining $25,500 will be taxed at 15%.

The last dollar(s) of income earned in this example is the $25,500 above and beyond the first $8,500 of income.

To solidify this concept, let’s look at another example. This time let’s say you’re filing jointly with your spouse, and have a combined income of $80,000. According to the chart above, the marginal tax rate is 25%. Here’s how your income would be taxed:

  • The first $17,000 would be taxed at 10%.
  • The next $51,999 would be taxed at 15% (the $51,999 figure is the difference between $69,000 and $17,001 in the 15% tax bracket range).
  • The remaining $10,100 would be taxed at 25%.

In this example, most of your $80,000 is actually taxed at 10% and 15%, not 25%.

Don’t feel bad if you don’t get this concept right away. Marginal tax rates are pretty confusing and even really smart people mess it up all the time.

Effective tax rate.  So now we know that the tax rate assigned to your bracket isn’t the rate you pay on all your income. Your effective tax rate is a weighted average of the different tax rates that apply to your income. For example, if your marginal tax rate is 25%, your weighted average, effective tax rate is about 14.5%.

Tax Exemptions. Uncle Sam doesn’t make you pay taxes on the full amount you earned during the year. The IRS provides three categories of tax breaks to individuals: exemptions, deductions, and tax credits. They all reduce your taxable income, but they do so in different ways.

A tax exemption is a specific amount you get to subtract from your taxable income automatically. There are two types of exemptions: personal and dependent.

  • Personal exemptions. If you’re single, have no children, and your parents aren’t claiming you as a dependent on their tax forms, you can claim a personal exemption for yourself. For the 2011 tax season, a personal exemption will reduce your taxable income by $3,700. If you’re married and filling your taxes jointly with your wife, you can also claim a personal exemption for your wife, thus reducing your taxable income by another $3,700.
  • Dependent exemptions. A dependent exemption is an exemption you can claim for each person you support financially. Usually this means your kiddos, but other family members can qualify too. You can deduct $3,700 for every dependent you claim on your taxes.

Not everyone gets to claim exemptions. Once you pass a certain income level, exemptions are phased out. For a single man, that limit is $166,800. If you’re married filing jointly, the limit jumps to $250,000.

Tax Deductions. Tax deductions are certain expenses you’ve had during the tax year that the government allows you to subtract from your taxable income. For example, the government allows people to deduct the amount they paid on student interest loans during the tax year.

There are two ways to take advantage of tax deductions. First, you can take the standard deduction which is a fixed amount determined by Congress that you can deduct from your taxable income. The standard deduction for single filers in 2011 is $5,800; for married filing jointly it’s $11,600.

The second tax deduction option is what’s called an itemized deduction. Instead of taking the fixed amount, with itemized deductions you list all the different “items” that are eligible for a deduction, add up the amount you spent on those items during the year, and deduct that amount from your taxable income. Eligible expenses you can deduct from your taxable income include, but aren’t limited to:

  • State and local income taxes
  • Property tax you pay on your home
  • Interest paid on your home mortgage
  • Donations to charities
  • Out-of-pocket medical and dental expenses
  • Job-search expenses
  • Out-of-pocket work-related costs like computers and cellphones
  • Home office costs

While itemizing your deduction is more complicated than taking the standard deduction, it has the potential of reducing your taxable income substantially more. If you plan on itemizing your deductions, you’ll need to keep a record of all your eligible expenses. We’ll talk a bit more about when you should take the standard deduction or when you should itemize your deductions in a bit.

Tax credits. Unlike tax exemptions and deductions that reduce your taxable income, tax credits are tax breaks that are subtracted directly from the tax you owe. There are several tax credits out there that you may qualify for such as the Hope Scholarship Credit, Child Tax Credit, and Earned Income Tax.

Tax refund. As money is withheld from your paycheck throughout the year, there’s a chance you’ve been paying the IRS more than what you owe in taxes. When this happens you’re entitled to a tax refund. It’s your money after all.  You determine your refund amount by filling out your tax form. If you’re getting big tax refunds every year, you might consider adjusting your withholding allowances so you can keep more of that money throughout the year.

Getting Organized

"Organize your receipts," they said. "It would make your taxes easier," they said.

Probably the most annoying part of doing your taxes is organizing all the paperwork you need to complete the task. When you’re first starting out in life, the only tax documents you’ll need to keep track of are your W-2s and maybe the 1098-E form showing interest paid on student loans during the year. As you mature financially, the amount of paper you’ll have to keep track of will increase.

To keep all my tax forms in one place, on January 1st I label a plain manilla file folder with “McKay Taxes INSERT YEAR.” As different organizations start sending me tax statements at the end of January, I just put them in my folder. When my financial life was less complicated, I’d take my folder, along with the appropriate 1040 form, and do my taxes in February. Now that I use an accountant, I just drop the folder off at her office. Easy peasy, lemon squeezy.

Below is a quick list of the various tax documents and receipts you’ll want to have in your personal tax folder:

  • W-2 from your employer
  • 1099-MISC forms for self-employment income
  • 1099-INT (interest) and 1099-DIV (dividends) forms
  • 1099-B forms showing brokerage trades in stocks and bonds
  • 1098-E showing interest paid on student loans
  • 1098 showing interest paid on mortgage
  • Documentation showing deductions like charitable contributions, medical expenses, and IRA contributions
The list isn’t exhaustive. If you plan on itemizing your deductions (see below), the amount of records you keep will increase.After you file your taxes with the IRS, make sure to print off a copy of your 1040 for your own records. Put it in the folder along with your other tax documents and hold onto it for at least three years. If you’re ever audited by the IRS (knock on wood), you’ll need to be able to show them your tax records.

Which Form Do You Need?

While using a computer program can make doing your taxes a breeze, I’d encourage you to at least try doing your taxes the old-fashioned way with pen and paper at least once. Flipping through the IRS’ instruction book to help you figure out your taxable income is a great way to become familiar with the basic rules and regulations of the tax code. Plus, there’s something about the tactile nature of pen, paper, and calculator that makes doing your taxes oh so “romantic.” Wear a green eyeshade for added effect. You can download all the forms from irs.gov or just swing by your local library; they should have a rack full of them.

There are three different kinds of personal tax forms to choose from: 1040EZ, 1040A, and 1040. They vary in length and complexity. Your goal is to pick the simplest form for your situation. When you do your taxes with tax software, the computer determines what form you should use based on the information you provide. When you do your taxes by hand, you have to figure out which form to fill out yourself. Here’s how to do it:

1040EZ. The 1040EZ form is the shortest and EZiest (see what they did there?) to fill out. You qualify to use the 1040EZ form if you meet the following requirements:

  • Your total income is under $100,000
  • Your interest income is under $1,500
  • You have income only from wages, interest, unemployment compensation
  • Your filing status is single or married filing jointly
  • You do not have any adjustments to income
  • You are claiming only the standard deduction
  • You may claim the Earned Income Credit
  • You are not claiming any other tax credits

Basically, if your income only came from wages and some bank interest, and you don’t have any income adjustments in the form of deductions, use the 1040EZ form.  If you’re young, in college, or don’t own a home, this probably describes you.

What makes the 1040EZ form so stinking easy to use is that it lumps together your exemptions and standard deduction into one simple subtraction problem. If you’re single and your parents don’t claim you as a dependent, your lumped together exemptions and standard deduction nut is $9,500. If you’re married filing jointly, your exemption/standard deduction nut is $19,000.

1040A. As you add layers to your financial life, the lines on your tax form increase. If you’re starting to invest in an IRA or you’ve invested and made money in the stock market, you’ll need to upgrade from the 1040EZ to the 1040A form. Use the 1040A if you meet the following requirements:

  • Your total income is under $100,000
  • Any age, any filing status
  • You have income from wages, interest, dividends, capital gain distributions, IRA or pension distributions, unemployment compensation, or Social Security benefits
  • You can claim the following adjustments to income: penalty for early withdrawal of savings, IRA contributions, student loan interest, and jury duty pay given to your employer
  • You can claim the following tax credits: child and dependent care credit, credit for the elderly and disabled, education credits, retirement savings contributions credit, child tax credit, and earned income credit
  • You are only claiming the standard deduction
Most taxpayers qualify for the 1040A form. If you’re out of college, married with kids, you’ll probably need to use the 1040A form.1040. The 1040 form is for folks whose financial life has moved beyond just a single W-2 form and paying some student loan interest. If you’re making money from a side business or you have a mortgage, you’ll need to upgrade to the 1040 form. Use the 1040 form if you meet the following requirements:

  • You have income of $100,000 or more
  • You are itemizing your deductions (such as mortgage interest or charity)
  • You have income from a rental, business, farm, S-corporation, partnership, or trust
  • You have foreign wages, paid foreign taxes, or are claiming tax treaty benefits
  • You sold stocks, bonds, mutual funds, or property
  • You are claiming adjustments to income for educator expenses, tuition and fees, moving expenses, or health savings accounts

Deductions: Standard or Itemized?

Earlier, we discussed how tax deductions come in two forms: standard or itemized. The standard deduction is a fixed amount; itemized deductions are complicated, but could reduce your tax bill more than the standard deduction. You can only take your deduction one way or the other, so you have to choose between taking the standard deduction or itemizing your deductions.

Which option you choose depends on your unique financial situation. The general rule is if the total of your itemized expenses is greater than the standard deduction ($5,800 single, $11,600 married filing jointly), you should itemize your deductions. If the standard deduction is greater than your itemized expenses, you should take the standard deduction. Duh.

Most young people starting out in life don’t have enough tax deductible expenses to warrant itemizing their deductions. Stick with the standard deduction until you have a mortgage and are filling giant trash bags full of clothes and leaving them on your doorstep for Prevent Blindness. (Make sure to get a receipt!)

I hope this little primer on income taxes was useful for you gents new to the game. For those of you who have been filing your taxes for awhile, do you have any advice or insights to add? Share them with us in the comments.

{ 48 comments… read them below or add one }

1 John February 29, 2012 at 3:06 pm

Love it! Excellent idea this is. AoM never fails to impress me with the breadth of their lessons.

I’ll be filing my taxes for the first time this year, so if anyone has any suggestions for further reading on the tax code, etc., I’d be happy to hear them.

2 Richard February 29, 2012 at 4:12 pm

The other key thing is don’t procrastinate. As soon as you have all your paperwork (W-2s, 1099s, 1098s, etc.) together, do your taxes. If you find out you are missing something, you don’t have to run around like mad trying to find it. And if you are due a refund, don’t you want to get *your* money as soon as possible?

And for those who try to lie or cheat their way out of paying taxes:

“The income tax is a just law. It simply intends to put the burdens of government justly upon the backs of the people. I am in favor of an income tax. When I find a man who is not willing to pay his share of the burden of the government which protects him, I find a man who is unworthy to enjoy the blessings of a government like ours.” – William Jennings Bryan

3 Mark February 29, 2012 at 4:58 pm

AOM I love your website and it does pain me to inform you that the math example for a single marginal tax rate is woefully incorrect.

4 Andrew From Canada February 29, 2012 at 5:02 pm

When I was 19, and wanted to learn how to do my taxes, I paid an accountant to do it and then studied the forms. Now I do it myself all the time and I learn something new each year.

5 Josiah Newton February 29, 2012 at 5:05 pm

Here in Ontario I just go down to the local H and R Block and pay them $70 to do it for me. As a poor working person, the government generously gives me almost $1000. After the fee and taxes I walk away $200 in the black.

6 Steve February 29, 2012 at 5:11 pm

Don’t get bogged down by the details that don’t apply to your situation. Go through the instructions on the areas that do apply. If you don’t know what it is…most likely it does not apply to you…move on!

7 Brett McKay February 29, 2012 at 5:14 pm

Mark-

You’re correct. Don’t know what happened there. Think I got it cleared up.

8 Terry February 29, 2012 at 7:21 pm

“Rather, you pay taxes on your gross income after you subtract the exemptions and deductions (see below) that you’re eligible for. This number is called your adjusted gross income or AGI.”
Actually this number is called your Taxable Income.

Adjusted gross income (AGI) is your income after certain deductions are subtracted, but before exemptions and (standard or itemized) deductions are subtracted.

Thanks for the otherwise great article.

9 Seth Carlson February 29, 2012 at 7:22 pm

A friend recently informed me that he filed his taxes on irs.gov no problem. Has anyone else done this or had any experience with it? I’d rather not purchase tax software that’s only good for one year.

10 Jimmy February 29, 2012 at 7:45 pm

Last year I had my father walk me through my taxes, and this year at 21 I’m doing them myself for the first time. I basically forced my older brother to do this year what I did last year too. Great article as always.

11 Ken February 29, 2012 at 7:58 pm

The marginal tax rate is even harder to get your head around than mentioned above. The example above doesn’t mention entitlements, tax credits, and wealth transfers, all of which needs to be thought of to compute the marginal tax rates.

Poor people have the highest marginal tax rates in the country (US) because of this. Low income earners can actually have LESS take home income the more their gross income becomes. Due to the loss of these perverse laws, their marginal tax rates are above 100%.

For example, if you are a single mother of three and make $25K/year. With all the entitlements, etc. received, you take home $25K/year (i.e. effectively no taxes are paid, since all wealth transfers and tax credits are accounted for, which make up for any taxes that might have been paid).

Now you get a better paying job making $27K/year. Since you make so much, you end up losing many of the credits and entitlements and no tax credits and you end up taking home $24.5K/year. This means that even though your gross pay is 8% higher, your net take home is 2% lower. Your marginal tax on that extra $2K is $2.5K, making the marginal tax rate 125%.

This is how many “anti-poverty” programs work, creating very high marginal tax rates creating the poverty trap.

12 Christopher Painter February 29, 2012 at 8:42 pm

Remember, too, that if you owe, you are not required to pay the amount due at the same time that you file. You can file immediately, but do not have to pay until April 17th.

Also, it is far better to file if you cannot pay than to not file at all; the IRS will hit you with much more severe penalties for not filing at all than filing and working with them to get your amount due paid off.

13 Asmor February 29, 2012 at 9:47 pm

The marginal tax rate is actually quite easy to understand, if you think about it the right way. The first time I read it, I couldn’t help but thing, “Wow, it does work the way I thought it should!”

So let me step back. Before actually paying any attention to taxes, I always thought that it was kind of weird that if you made a certain amount, you might end up with less money than if you had made less.

For example, if you made $8500 in 2011, you’d pay 10% of $850 in taxes. But if you made $8501, you’d pay 15% or $1275 in taxes, so by making an extra dollar you’re losing $425!

Wouldn’t it make more sense if only the extra income above that lower bracket was taxed differently? So you still pay $850 on your $8500, but then you pay 15% of your dollar over, so by earning a dollar more pre-tax you actually get 85 cents more post-tax.

Well, it makes so much sense that that’s actually how it works.

At least, it makes sense to me.

14 Rob February 29, 2012 at 10:28 pm

first year I won’t be filing my own taxes but have to have someone else do them. Wife and I are filing separately and she has a weird student loan situation

15 Matt March 1, 2012 at 5:39 am

Ken do you think that most people who fit the profile of your $25K income example are calculating the marginal tax rate associated with taking a $27K job and electing not to do it?

16 Steven Martin March 1, 2012 at 6:03 am

Avoid Turbotax and TaxCut. Use a simple on line tax prep program like TaxHawk. Free Fed Efile and only $12.95 for State. Thoroughly enjoy using TaxHawk. It walks you right through it and doesn’t bother you with things that don’t apply to your own situation. When I help a friend or relative, you can collaborate and build on joint efforts since its web based. Just a great tool and approach.

17 AB March 1, 2012 at 7:16 am

It is strange for me to consider filling of tax forms manly. Actually in ideal situation should be so easy as brushing your teeth (what definitely “manly” although it is of course neccessary). In my country there is 19% flat tax on all types of income and only about 25 tax deductions. Easy and fast…

18 Sal March 1, 2012 at 8:20 am

Great Article. tax question here and I’ll try to make it brief. My wife and I purchased a home in 2009 from an Elderly woman. We were grandfathered in on our property taxes for 2010 and so in 2011 our property taxes almost doubled (we knew it was coming). Anyway when we filed in 2011 we were shocked to see that we owed almost 800 dollars ( we had taked advantage of the first time home buyers credit in 2009).
Fast forward to a few weeks ago when we go to file for our 2011 taxes and we once again owe about 800 dollars. How is it possible that with our property taxes almost doubling, that we could still owe that much?
I realize there probably isn’t enough information in this post to get an accurate answer from someone, but I’m just a little confused on this. Anyone have any thoughts? Thanks

19 Jeff March 1, 2012 at 8:49 am

Very informative. I do have one question, though. For the past couple of years, I have been getting pretty decently sized refunds back from both my federal and state returns. I don’t like the idea of providing those interest free loans. I know I can change my withholdings on my W-4, but I was wondering if there is a general rule for how big a refund should be before changing your withholding? Thanks.

20 CB March 1, 2012 at 9:19 am

@Jeff: There really isn’t a rule of thumb per se. You can run the calculations as often as you like to see how much you will have had withheld in taxes at the end of the year and work through a 1040* form to figure out what you should owe and the difference. If there is a rule of thumb it is this: If you’re taking the standard deduction, your life is fairly simple and your getting over $1000 in tax refunds, claim an extra exemption or 2 on your W-4 and you’ll probably end up within a few hundred dollars plus or minus. (BTW I’m not a tax advisor, CPA, CFP, etc. This is just advice from another guy that does his own taxes. I know this works because I know that the math is simple if not straightforward.)
I basically comes down to how much your time and effort is worth. As I stated you can do the calcs as often as you like but is it worth it to end up with a dollar or two extra per paycheck?
Good luck!

21 Andy March 1, 2012 at 9:44 am

@Sal – Property taxes are generally handled by the state, and don’t have any effect on your federal taxes unless you are itemizing deductions on your 1040 Schedule A. I would check to see if you are using the standard deduction or if you are itemizing properly. Like mentioned in the article, you need to make sure you file a 1040, not a 1040A or EZ. After buying my house in 2009, I found that I can itemize the mortgage interest, mortgage insurance, and property taxes. Without knowing the specifics of your situation, that is where I would start.

22 Jay March 1, 2012 at 10:33 am

Marginal Tax Rates filing jointly:
If, the first bracket is 17,000;
If, the second bracket is 51,999;
If, I well understood (which I doubt it);
The last income earned should be $11001 or {80000 – 17000 – 51999 = $11001}. Why $10100??
Thanks.

23 Todd R. March 1, 2012 at 11:08 am

Love your website. A couple minor tweaks, but important in order to not confuse terms.

“Tax Deductions… For example, the government allows people to [deduct the amount they paid on student interest loans during the tax year.]”

To clarify, student loan interest is an adjustment to Gross Income (bottom of page 1 of the 1040), not a potential itemized deduction (calculated via Schedule A and entered at the top of page 2 of the 1040.) You got it right further up when you said,

“Your adjusted gross income is your income after you subtract certain deductions like IRA contributions or payment on student loan interest.”

Also, would change the word “deductions” in the referenced AGI sentence above to read “adjustments”. Helps avoid confusing the two ideas.

Cheers,
Todd

24 TheDesertRat March 1, 2012 at 11:19 am

This article is too funny! I too, remember a time, when I wanted to earn enough to have tax “problems”. I learned to be careful of what you wish for! These days, in addition to an investment of my time it also costs me plenty to have a tax accountant do most of the work. So a much simpler tax code would be a welcome sight.

25 Scott March 1, 2012 at 11:40 am

I’m one of those “30 and Dad always did the taxes” guys. My dad was a professional tax accountant, so it was an easy habit. Last year, I calculated my own taxes, but still let him handle the filing. This year, I filed it myself, and just had him double check my result. Submitting those forms myself was a surprisingly liberating experience – there’s definitely a manly confidence from taking on that responsibility.

I used H&R Block’s standard edition which created the 1040 and Schedule A for me. The software would have charged me to e-file, so I copied the numbers into the page linked from irs.gov. I paid nothing to file and already received my refund.

26 Mattress Specialist March 1, 2012 at 11:54 am

They should do a university degree in how to submit your tax return. It’s so confusing.

27 Simon March 1, 2012 at 12:55 pm

Thanks a lot for writing this! I just recently started doing my taxes with my dad (I’m 18). Like you, I found them to be rather fun and one of the first official steps into adulthood.

Are there seriously grown men in their 20s-30s who don’t know how to file their taxes?! The thought boggles my mind…

28 Jeff March 1, 2012 at 1:49 pm

The manliest thing I ever did was marry a very smart woman. Twenty-one years now, and I have never done our taxes. (I could, but there is probably some wood to haul, or oil to change somewhere.)

29 D March 1, 2012 at 2:32 pm

I am a young woman, but this was tremendously helpful. Thanks!

30 Ak-adventurer March 2, 2012 at 3:42 am

Great timing!
Justgetting ready to domine forhe firs timehis week.

I will say though, not all of us that are in our late 20s(I’m 27) that have never done it before have been having our folks do it; I’ve simply never made enough to come up to the lowest bracket before. (That’s official, I checked by asking H&R Block for a few years if I had made enough to bother filing. i never have till this year. Maybe. We shall see.)

G.

31 Doug March 2, 2012 at 7:46 am

I must say, I fit right into the category for whom the article is written for, I’m trying to get a better grasp on this stuff, but it is indeed quite confusing. I appreciate the initial start though!

32 tim_lebsack March 2, 2012 at 11:52 am

Thank You, very good article.
re: “Growing up, I associated “doing your taxes” with being a grown man.”
Long past grown up, I associate “doing your taxes” with the millions of children who will drop the burden of current overspending.

33 Bobby March 3, 2012 at 3:11 pm

Nice! Can we get more tax articles?

34 Michæl Atchison March 3, 2012 at 11:57 pm

it’s incorrect to say that of your marginal rate is 25%, your effective rate is 14.5%. Your effective rate is your tax from line 44 divided by your taxable income from line 43… so if your taxable income is $139,350 your effective rate is about 19.4%… and if your income is 69,001 (same 25% bracket) your effective rate is only around 13.8%. Please check my math.

35 Michæl March 3, 2012 at 11:59 pm

it’s incorrect to say that of your marginal rate is 25%, your effective rate is 14.5%. Your effective rate is your tax from line 44 divided by your taxable income from line 43… so if your taxable income is $139,350 your effective rate is about 19.4%… and if your income is 69,001 (same 25% bracket) your effective rate is only around 13.8%. Please check my math.

36 John Galt March 4, 2012 at 4:36 am

The government is not actually entitled to any more of our earnings than it takes to defend us from criminals and foreign powers. Social programs are a scam, and it is time that sovereign citizens begin to itemize what they actually get from the government when they file their taxes, and bill the IRS for waste.

It is most manly to never pay for a service that does not benefit one. Charity is one thing, but legalized extortion at the hands of a governmental entity is quite another.

37 Jeff March 5, 2012 at 10:26 am

@CB, thanks for the info. The IRS actually has a calculator on its website to help pick the number of exemptions. It said I should increase mine from 2 to 9. I was skeptical, but when I did my taxes on turbotax this weekend, it had an option to fill out a W-4 and it said I should increase my exemptions to 10. Being married with kids and a mortgage apparently really brings down the taxes that I owe.

38 Paul Bhattacharyya March 8, 2012 at 4:27 pm

Truth be told. Federal income tax is illegal. Find out about truth in taxation from taxhonesty.org. The IRS is unconstitutional and the income tax that is mentioned in the Constitution is inapplicable to most all American citizens. Please look into this for yourself, I know it sounds preposterous. The money collected does not pay for any of the services most Americans believe it does. It pays the interest on our fraudulent national debt. Please ask questions of your government it is the most patriotic duty you have.

39 Paul Bhattacharyya March 8, 2012 at 4:28 pm

Truth be told. Federal income tax is illegal. Find out about truth in taxation from taxhonesty.org. The IRS is unconstitutional and the income tax that is mentioned in the Constitution is inapplicable to most all American citizens. Please look into this for yourselves.

40 Paul Bhattacharyya March 8, 2012 at 4:29 pm

Truth be told. Federal income tax is illegal. Find out about truth watch Aaron Russo film Freedom to Facism

41 Paul Bhattacharyya March 8, 2012 at 4:35 pm

Federal income tax is illegal. Please check it out

42 Paul Bhattacharyya March 8, 2012 at 4:41 pm

I love paying income tax! I feel happy and free!!!

43 Simon Crabtree March 9, 2012 at 6:37 am

As a British person, this article amazed me. Here’s how you do your taxes in the UK;
If you are self employed:
1) Answer the easy yes/no/how much questions on the paper or electronic form provided (depending on how you registered).
2) Pay the amount they tell you.
If you are regular employed:
1) Do nothing. All taxes have been collected straight from your employer under PAYE. If there was a mistake, you might even get a rebate.
If you have several jobs at least one of which is self employed it gets a little more complicated, but in my experience the good folk at HMRC are friendly and helpful and if you take the time to politely explain any problems that you have will bend over backwards to make things easier for you. I do have friends who have had problems with them, but if you choose to express your problems by shouting at a call centre operator on minimum wage you can hardly blame anyone else if they are a little less understanding.

44 Pete Price October 15, 2012 at 12:54 pm

I started a small business last January and I used Lou Patten CPA in Lake Worth to do my business planning. Mr. Patten assisted me with a business development plan and a financial analysis. He is really good and very affordable. I suggest you check him out. Here’s his website http://www.loupattencpa.com

45 Anne October 26, 2013 at 9:46 am

I thought this article was really interesting! I’m only 17 and I don’t work yet so technically I don’t have to worry about this, but I was always curious on how it worked. I’m in AP econ so I understand for the most part the terminology and how you do the math. I’ll probably ask my teacher to explain some things so I understand better but I really love your explanation!

46 Shena Pogorelc December 8, 2013 at 2:10 am

It appears to be like like wonderful publish, having said that it just an individual side from the medal. Good reading in any case, I often appreciated excellent brain teaser and solid amount of nice information.

47 Sarah February 23, 2014 at 8:32 pm

I’m not a gent, but this was helpful to me. Thanks :)

48 Lai April 11, 2014 at 11:59 pm

Great Article. Clearly explained all my the questions I had.

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