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Prisoner Re-Entry and Understanding Taxes (Get Right With Your Taxes)

Taxes help make life in one of the world's greatest countries possible.

They support the services and systems we rely on every day, like public schools, parks, roads, highways, and public transportation.

And taxes also help fund the men and women of the United States Army, United States Navy, United States Air Force, and the United States Marine Corps who protect our country.

That's only one example of what taxes support.

Filing a federal tax return can also benefit you personally.

It helps keep you in good standing with the Internal Revenue Service, and in many cases, you may even receive money back through a refund or tax credits.

While paying taxes may not be anyone's favorite task, finally, your return can bring real advantages.

First, refunds.

Whether you're an employee, contractor, or business owner, if taxes are taken out of your pay, you may qualify for a refund.

Second, tax credits.

Some tax credits are designed specifically for people with lower incomes.

Even if you don't owe taxes, certain credits can still result in a refund, but you must file a return to receive them.

Third, proof of income.

A tax return provides official proof of income, and this can be important when applying to rent A home, buy a car, or get a loan.

4th, Social Security benefits.

Your Social Security benefits are based on your work history.

Filing tax returns, especially if you're self-employed, ensures your earnings are properly recorded.

Fifth Peace of Mind.

Filing your taxes reduces stress and prevents problems later.

There are many free and low cost options available to help you file.

If you haven't filed in a while, you may still be eligible for a refund.

In most cases, you have up to three years to file and claim it.

The IRS can help you get copies of your income records, such as W2.

And so now let's talk about what you need to do to stay on track with your taxes when you get a job or start your own business.

Even when someone hires you as an employee, they should give you W4 to fill out.

It tells the employer how much tax to withhold from your paycheck.

The W4 includes a worksheet that will help you figure out how much to have withheld.

You can also go to the IRS website and use their handy withholding calculator.

If your employer withholds too much, it'll give you a smaller regular paycheck and a big tax refund.

If your employer withheld too little, you might have to pay taxes when you file your return.

If you work for an employer, they will usually send you A W2 form in January.

You can use that information to complete your tax return.

If you're a contractor or business owner, taxes can be more complex.

However, free help is available in many communities now.

One of the most common options is volunteer income tax assistance, known as Vita, the Vita Locator or call 1-800-906-9887, or the Tax Counseling for the Elderly TCE AARP locator or call 1-888-227-7669.

These sites are run by IRS partners and staffed by trained volunteers who provide free tax preparation for people who qualify.

Some locations also offer financial counseling and savings programs.

You can also file your taxes online for free through IRS Free File, or you can hire tax professional if you prefer.

If you don't have a computer, you can use one at a Public Library or call the IRS for assistance.

Now, one credit you may qualify for is the Earned Income Tax Credit, EITC.

This credit is for workers with low to moderate income, even people without children who qualify for a refund.

Those with qualifying children may receive a much larger credit, the Child Tax Credit, CTC.

It is where families with qualifying children may receive a credit for each child depending on income and other rules.

So to receive these credits you must file a tax return.

Understanding your tax forms, Employees fill out A W4 when hired.

This form tells the employer how much tax to withhold from each paycheck.

At the end of the year, the employer sends A W 2 showing wages and taxes withheld.

Contractors or self-employed workers usually receive a 1099 form.

They are responsible for paying their own taxes, including quarterly estimated payments.

If you believe you're being treated as a contractor but should be an employee, you can ask the IRS to review your situation now to avoid tax scams.

Be cautious of anyone promising large refunds without reviewing your financial information.

Illegal tax scams can lead to fines, penalties, or even prison time.

So you're responsible for everything on your tax return, even if someone else prepares it.

So never sign a return unless you are sure it is accurate.

If you owe back taxes.

If you haven't filed or owed taxes, it's best to address the issue as soon as possible.

The IRS offers options such as payment plans, offers in compromise, settling a debt for less than the full amount, help from low income taxpayer clinics, and assistance from the Taxpayer Advocate Service.

The first step is to contact the IRS and discuss your options.

So in short, paying taxes is an obligation, but it also brings benefits, refunds, credits, proof of income, Social Security credit, and a Peace of Mind.

Help is available and filing a return is the best way to stay on track financially.

The best place to get information about filing a federal tax return is the IRS website.

You can download forms, get answers to questions, find out where to get help, and a whole lot more.