When students receive a W-2 form from their employer after January 1, they may feel a bit anxious. The form could be the result of a summer job or from a current job.In this lesson, students are given a hypothetical situation where they have to file their first income tax form. This form is usually a 1040EZ form. The 1040EZ is used in most cases because student(s) (1) wages are low, (2) don’t itemize deductions, (3) usually do not have dependents, and (4) may or may not be claimed as a dependent on their parent’s tax return.
During this lesson you will complete a 1040EZ tax form using information from a W-2 form. You will also learn what each of these forms are used for. Finally you will be able to define a taxable year.
You have been sent a W-2 statement from your employer. A W-2 statement is a statement of earnings over the past taxable year (Jan 1 through Dec 31). This is a form filed with the federal government detailing how much money you were paid last year and how much money was deducted for federal income tax withholding. You are required to file your taxes with the IRS to determine if you are entitled to a refund or if you have to pay additional money for income tax.
According to your W-2 statement, your wages were $11,357 for the previous year. The amount deducted from your earnings for federal income tax was $1,248. In addition to your wages you earned $488 interest from your savings account. You are filling as a single person and you are claimed as a dependent on your parent's tax form.
Follow the instructions on both sides of the 1040EZ form to determine if you are entitled to a refund or if an additional tax payment is due. The Tax Form will give you a step by step approach for accurately filling out the form and filing their taxes. If the form itself is not enough, students should read this article called "How to Fill Out a US 1040EZ Tax Return". This article provides easy to follow step by step instructions on filling out the 1040 EZ form.
Complete "Worksheet for Line 5 - Dependents who checked one or both boxes" when you are done answering the questions. This is located on the second page of the Tax Form.
Are you entitled to a refund? If so, how much? Do you have to pay additional money for your income tax? If so, how much?
Filling out a tax form can be frustrating. Tax preparation services can charge as much as $150 to prepare this form.
Follow the steps on the 1040EZ form line by line. Consider the following as you complete the form:
1. What are the important facts needed for filling out the form?
2. What does it mean to be claimed as a dependent?
3. What is the difference between adjusted gross income and taxable income?