Taxes 101 | theSkimm

Taxes Pack

pile of tax forms and receipts

Taxes 101

Two things are certain in life: death and (the anxiety while doing) taxes. But a little prep can help get rid of the tax season scaries. We’re here to hold your hand.

Learn the Language

Easy as 1, 2, 3, W-4.


1040flashcard

1040

The most popular tax return form. Where you tell the IRS all your secrets: your name, address, filing status, and how much you made in the past year.

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1099 fsl flashcard

1099

Your best friend in tax document form if you earn money from anywhere (or  anyone) other than your regular 9-5. Collect them from freelance clients or the bank that paid interest on your savings account. Then use the info to fill out your tax return.

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AGI FSL flashcard

Adjusted Gross Income (AGI)

Your gross (aka total) income for the year minus certain payments you’ve made. Like student loan interest and IRA contributions. Hint: the more you can subtract, the better.

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audit fsl flashcard

Audit

When the IRS takes out their magnifying glass and double checks that you filed your taxes correctly. Not a reason to panic...as long as you told the truth, the whole truth, and nothing but the truth.

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DependentFSL

Dependent

Anyone you support financially. Usually a child, spouse, or retired parent you ‘invited’ to move in. The more you have, the less you could pay in taxes. Yes, please.

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Filing Status FSL

Filing Status

A category that helps determine your tax liability and standard deduction amount. Based on things like your marital status and how much you contribute to household expenses.

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Tax Bracket FSL

Tax Bracket

One of seven buckets the gov puts you in based on how much money you make. Mo money, mo taxes. 

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Tax Credit FSL card

Tax Credit

An amount you can subtract from the taxes you owe because you did something the gov likes. Think: saving for retirement, investing in your education, having a kid, installing solar panels, etc.

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Tax Deduction FSL card

Tax Deduction

When the gov cuts you a break, and lets you subtract some costs from your taxable income. Choose between the standard (flat-rate) discount or itemized one, where you add up all the dolla bills you could get off and hope it’s higher.

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Tax Refund FSL card

Tax Refund

Money mail you get if you paid more taxes than you needed to. Seems great, but actually means you gave the gov an interest-free loan. With money you could have invested or bought a pony with.

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Tax Return FSL card

Tax Return

The paperwork that stresses you out every April. And tells Uncle Sam whether he owes you or you owe him.

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W-2 FSL card

W-2

The doc where your employer comes clean about how much they paid you in the past year...and how much they withheld for taxes. V helpful for filing your return.

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W-4 FSL card

W-4

That form you fill out when you start a new job. It tells your company how much to withhold from your paycheck. Psst...you might wanna edit yours when you: have a kid, get married, or cash a big tax refund check.

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Withholding FSL card

Withholding

The part of your paycheck that your boss puts toward your taxes. The amount depends on your earnings and how you filled out your W-4.

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