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New Taxpayers: Basic Info

Authored By: Northwest Justice Project - CLEAR Intake Line LSC Funded
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If you are new to the United States and/or you are just starting your first job, this resource provides general information about taxes, what they are used for, and how to pay them.

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Should I read this?

Yes, if

  • You are new to the United States and/or

  • You are just starting your first job

What are taxes? What are they used for?

The United States Constitution gives the U.S. government the power to tax.  The money the government collects from individuals and businesses is called "tax". The government uses taxes to fund goods and services that are free to the public, such as:

  • Public education (schools)

  • Roads

  • Our national defense (military)

  • Police forces (cops)

  • Social Service programs

The government agency that collects taxes is the Internal Revenue Service (IRS).

I have earned income. How do I pay taxes?

The U.S. uses a "pay as you go" tax system. When you work for an employer, s/he withholds the tax from your earnings and pays it to the IRS for you.

When you start a new job, the employer should have you fill out a form called a W-4. The W-4 form asks questions such as whether you

  • are single or married

  • have dependent children

  • have more than one job

This information helps the employer figure out how much tax to withhold from your wages.

What other information does my employer need on my W-4?

You must use your correct social security number (SSN) or Individual Taxpayer Identification Number (ITIN) on your W-4. No two numbers are the same. These identifying numbers are how the IRS keeps track of taxpayers and how they know you paid your taxes. You must give your employer the right SSN or ITIN so the taxes they pay for you are paid under your number.

What if I have my own trade or business?

The law considers you self-employed. You must make your own tax payments to the IRS on a quarterly basis (four times a year). Use the IRS' 1040-ES form.

What is an income tax return?

The U.S. uses a "voluntary compliance" system for paying taxes. Every person is responsible for filling out their own income tax return every year.

You may have already paid (some) taxes throughout the year, either through your employer or by making quarterly estimated tax payments. You still may have to file a federal Income Tax Return form. It is due by April 15th of each year.

What is a tax break?

You may be able to lower the amount of tax you must pay with a tax break. These include:

  • Deductions – these reduce the amount of your income that is subject to tax

  • Exemptions – this is the part of your income that the government cannot tax

  • Credits – these are reductions in the amount of tax

Do I have to file a tax return?

Probably. In 2016, for most people, if you were single, under age 65 and had gross income of more than $10,150, by law you had to file.

You may be due a refund. If you paid too much tax during the year, or you are entitled to certain tax credits, such as the Earned Income Credit, or Child Tax Credit, you can only get the refund by filing a return.

Read Tax Tips for more information about the Earned Income Tax Credit.

It may help your immigration status to file a tax return. Doing so would

  • Show you are obeying the law

  • Document your work, presence, and family status in the U.S.

Can I get help filing a tax return?

Yes. Read Tax Tips for more information about where to get help.

 

This publication was adapted from information provided by Legal Services of North Dakota.

 

 

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 This publication provides general information concerning your rights and responsibilities. It is not intended as a substitute for specific legal advice.
This information is current as of February 2017.
© 2017 Northwest Justice Project — 1-888-201-1014.

(Permission for copying and distribution granted to the Alliance for Equal Justice and to individuals for non-commercial use only.)

Last Review and Update: Feb 14, 2017
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