mellybrown

hmm ok so as i am now employed I guess I Will have to file my taxes next year - so what kind of things do i need to keep - just payslips? or bank statements? We didnt have to do anything this year and we arrived just as they were being filed!! Dont want to throw stuff away only to find I need it come next year!!!

Vimto

Your employer will send you a W-2 form at the end of the tax year declaring the all taxes and other deductions they have made from your payroll. When you file your tax return next year you or your tax preparation firm will need to this form.
They dont need individual payslips or bank statements.
If you have more than 1 employer in a year you will receive additional W-2 forms.

fatbrit

You should have filled out a tax form when you started work. This controls how much they deduct for state and federal taxes.

MsElui

the W2 is the US equivalent of the UK P60 - summary (per employer) of annual earnings/taxes.

kins

We did our taxes using TurboTax last year. It's worth going through the process of creating a TurboTax return so you can get some idea what kind of things you can deduct and what receipts you'll need.

We took the standard deduction (is that what it's called?) so we didn't need that many receipts but if you're itemising then you might need more.

I remember we needed information from the mortgage company, plus something to say how much we spent on healthcare...

Michael

You didn't take the standard deduction if you deducted items such as mortgage interest, medical costs, property taxes, auto license fees, and/or state income taxes.

Turbo tax may have assigned you the standard deduction if your deductions were not as great as the standard (minimum) deduction. If that was the case, any information entered for deductions was not used.

kins

Yes I seem to recall I tried entering the information both ways out of curiousity then didn't need most of it...

robin1234

Fortunately US banks etc. will send you a statement of interest earned the previous year, in January. I think it's called a 1099-INT. So, you don't need to keep track of the statements. However, if you have any interest income from foreign banks, you'll need to compile that from the statements, because they won't send you a 1099-INT or equivalent.

robin1234

We always simply take the standard deduction. It is relatively high, so unless you have lots of mortgage interest and very high medical expenses, it is often advantageous (and much easier) just to go with the standard deduction. Another major advantage of taking the standard deduction versus itemizing; you will be in less danger of being hit with the Alternative Minimum Tax sometime in the future.

mellybrown

thanks

well this alsounds mighty confusing! I shall just wait till next year and hope it magically sorts itself I guess!!!

fatbrit

Not a good idea. It's not like Blighty where the tax withholding is calculated accurately. Have you filled out a W4?

robin1234

Actually it's dead easy if the only income you have is salary and maybe a little bank account interest. It starts to get complicated when you have other situations (kids with college tuition, capital gains, you own a business etc.) Whether you can use the 1040EZ, 1040A, or the actual 1040, you should be able to knock it off in an hour or two. If I were you, I'd do it manually (pencil on paper 1040) at least for the first year. Then, you'll understand the basic principles & you can decide to use Turbotax or similar in future years.
There are loads of "tax for beginners" type articles on the web. Here's one from Kiplingers Personal Finance Magazine for instance---
http://findarticles.com/p/articles/m...54/ai_59486132
The IRS themselves are pretty helpful and the instructions to the form 1040EZ, 1040A etc are in fact all you really need.

ugacrew

For a beginner I'd recommend doing BOTH. I'd file electronically though. You'll get your refund much Much quicker than that. Last year I got my refund in via direct deposit in 5 business days. I got my State much quicker. The good thing about doing TurboTax is that it will check for errors. Plus it's much easier than doing a manual return. Since this is your first go round you'll probably make a mistake that may flag you for audit. However do both anyway just to make the process more 'transparent'.

fatbrit

If you get a refund you are a beginner. Or an idiot.

ugacrew

I got a refund because I have shit load of deductions higher than the standard deduction. If it weren't for owning a home I'd be paying Uncle Sam out the nose.

EDIT: I also make pre-tax contributions into a 403b there by lowering my taxible income thus I'm in a lower tax bracket.