Filing federal taxes

0:00- In this video, we're gonna talk a little bit about filing taxes. And in particular we're gonna talk about federal taxes. You might also have to pay or file state taxes. So the first question is, is this even something that you need to do? Now, the simple answer is if you make over a certain threshold, yes, you likely have to file federal taxes.

0:23Now, what is that threshold? In 2024, it was $14,600. And this will likely change, probably increase from year to year. But it gives you a sense, and this is not just your paycheck income, it's all of the income combined. For example, interest income that you might have had or investment income, depending on how you classify it, would also be included in this.

0:46So if you cross this threshold, you definitely need to file. Now, even if you don't cross this threshold, you still probably want to file. You might be eligible for certain tax rebates and or credits, which literally could be free money for you that you are not going to get back unless you file the taxes.

1:09Now, some of you might say, well, my parents are filing with me as a dependent, I don't need to file. That might be true, but if your income exceeds the filing requirement for a dependent, you still need to file. So you need to look that up. Now the next question you might worry wonder about is, well, what kind of form do I fill out?

1:28Well, most folks, the most common is the 1040 form. But there's also variations on it. There's a 1040 SR for seniors. There's a 1040 NR for non-resident aliens. And you might say, oh, I have some rental properties, or hey, I'm self-employed in other ways. And oftentimes there are schedules which are an extra page or two in the tax form.

1:50And if you're filing online, they fill that out for you. They'll just make you fill out a few extra questionnaires and they add that to the 1040 when you file. Now, some of the other things to keep in mind, April 15th is the filing deadline. You might say, oh, I already paid taxes all year, maybe I don't need to do this.

2:08Well, no, especially if you meet the constraints that we talked about before, you need to file your taxes by April 15th or you can get an extension. And some years I have gotten extensions either because I just didn't have all my act together or because certain paperwork, I didn't get it from someone that I needed to report on time, so I had to file an extension.

2:30Now, even when you file an extension, if you owe money to the federal government, you should still pay it in time, ideally in the year that you're filing for. But the longer you wait, they're going to charge you a penalty and they're gonna charge you essentially a form of interest on that.

2:45Now, when you file, one of the first questions that you'll be asked, whether you do it on paper or whether you do it online, is how you want to file. And the options are single. So if you are a single person who doesn't have any qualifying dependents, so it's just you, then you file as single.

3:05Then there's two variations if you are married. There is you can file jointly or you can file separately, which is each of the partners files their own and they file separately. Now you might say, well, what do most married people do? In most cases, it makes sense to file jointly.

3:25The way that the tax brackets work give you a slight benefit when you are filing jointly. But there are certain circumstances where if one of the partners, let's say, has significant medical expenses or other deductions or needs to qualify for certain things that are based on income and maybe their income is lower than the other partner, it might make sense to file separately.

3:47But this is usually the exception, not the rule. And if the other partner is in some kind of criminal investigation or you don't trust their numbers, et cetera. But that's probably bigger issues about the marriage than just the taxes there. But there is also head of household.

4:02Head of household, so who would fall under this? Well, if you are non-married and you are single, let's say you're a single mom or dad, but you have qualifying dependents, you should file as head of household. And then last but not least, there is something known as a qualifying, surviving spouse.

4:27And this is in the situation where if one partner has passed away, this might be where you need to file. So hopefully that gives you the overview of everything. When you file, remember, well, you should think about filing. Make sure that you need... Make sure that you're filing when you need to file.

4:46Make sure you have all of the information together. It's a common mistake to only show the things that are on your W2, but you have bank statements, you have other forms of income that you definitely need to report. Make sure you file on time and make sure you understand your filing status.