By: Marissa Valentine
Tax season begins every January as employees across the United States await their W-2 tax statements, hoping the correct amount was withheld from their paychecks. In contrast, many seasoned adults find tax season to be a simple process of filing and filling in the blanks, while young adults, and even a few adults in their late thirties and early forties, find the process anxiety-inducing. As a native Texan, who has been in Ohio for approximately five years, I find the different types of taxes required confusing and, frankly, excessive.
Different Types of Taxes
In Northeast Ohio, you are required to pay various taxes beyond your required income taxes. Individual cities or villages levy school and property taxes, and the amount varies based on where you live. Sales tax, income tax, and taxes in the city where you work are additional taxes that citizens pay. These taxes do not always come directly out of your paycheck as the state or federal taxes do, so it is essential to know which websites you need to access to pay these taxes. Because many Ohioans also pay taxes in the city where they work, they interact with the Regional Income Tax Agency (RITA). If you have not paid your RITA tax or are unfamiliar with taxes owed to this entity, their website offers resources and payment plans to ensure that you remain in compliance.
Tax Tools and Resources
Preparing taxes can be a daunting task. Well-known tax preparation companies such as H&R Block help individuals file their federal and state returns. However, several other tax preparation companies function in the same way as H&R Block, including:
ntuit – According to their site, “If you have a simple Form 1040 return only (no forms or schedules except as needed to claim the Earned Income Tax Credit, Child Tax Credit, student loan interest, and Schedule 1-A), you can file for free yourself with TurboTax Free Edition, or you can file with TurboTax Expert Assist Basic at the listed price.”
FreeTaxUSA files your taxes directly to the IRS offers an entirely free version to users, but if you require more support or have questions, the deluxe version is only $7.99.
Ramsey Smart Tax offers users three versions with varying levels of support before submitting on your behalf to the federal government. They offer Smart Tax Federal Classic for $19.95, Smart Tax Federal Premium for $39.95, and Smart Tax Federal Premium + Every Dollar. With each price increase, the level of support and itemization.
Deductions and Why They Matter
The free version of TurboTax or other tax preparation companies is enticing, especially if you do
not want to pay the filing fee, which can cost anywhere from $7.99 to $130. Paying the extra fees covers the analysis of itemized deductions, including the child tax credit, child and dependent care tax credit, earned income credit, student loan interest deductions, and any additional retirement accounts or taxable assets.
Deductions are amounts of money subtracted from your income that you do not have to pay tax on, therefore lowering your tax liability, as noted by the IRS website. Knowing which deductions apply to you will save you money and reduce your tax liability. The IRS website has a frequently asked questions section that provides insight on which deductions you may add and what forms are needed to verify those deductions.
Tax Deadlines and Extensions
National filing deadlines are imperative to remember so that you have sufficient time to collect the necessary forms. According to the Internal Revenue Service (IRS) , the last day to file is April 15th. If the filing deadline falls on a Saturday, Sunday, or legal holiday, the due date is delayed until the next business day. If you need an extension to file your federal taxes, you will be granted the extension to file, but an extension to file your taxes is not an extension to pay.
