The Basics of Taxes and Tax Preparation

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In this video, EY provides a detailed explanation of the US tax system. Dan starts by outlining the fixed percentages of Social Security and Medicare taxes, with a cap on Social Security tax. They emphasize the significance of the W-4 form in determining income tax withholding. The speaker describes the tax estimation process, underscoring the pay-as-you-go system. The Form 1040 is spotlighted, broken down into sections covering personal information, income, adjustments, and deductions. Throughout the presentation, the importance of accurately completing these sections for proper tax filing is stressed.


Hi there, and welcome to today's information session.

I know many of you have either recently moved to the United States or will be moving soon, so first of all, congratulations on your new role and let me be one of the first to welcome you.

My name is Dan Eck with EY, and I'll be leading you through today's session.

EY is a global company that does many things, including educating individuals around money and finances and taxes.

Certainly, this is an exciting time for you, but it comes with some challenges as well, including learning about the US tax system.

Today, we're gonna spend some time learning more about how taxes work in the United States.

Now let me first make one suggestion to all of you. The real value of any presentation like this comes from how you actually use the information that you learn. So what I'll ask you to do is grab a piece of paper and a pen, and write the words "personal action plan" at the top.

And as we talk today, just write down any action steps that you hear about in the session or that you think about as you listen, that you need to follow-up on after we're done here. It may be something you do tonight, next week, a month from now, or with your employer, but make sure that you jot those action items down, you hang on to that piece of paper because you're more likely to complete those action items if you have them written down and you keep them in front of you.

Now you might have guessed that you'll need to pay income taxes to the US federal government, but there are additional taxes and tax entities that may also want their own slice of the pie that you'll have to pay some taxes to as well. So let's start today with an overview of those taxes that you may need to pay on the income that you earn here each year.

Now the reason we're gonna start here is because you're going to see several different taxes that are taken out of your paycheck and sent to various government entities instead of given to you throughout the year as you receive your paychecks during the year. So let's look at some of those taxes today on this slide.

The first two that you'll see are Social Security and Medicare.

We'll talk about those two together.

We all pay a tax to the Social Security system and the Medicare system here in the US through our paychecks.

These are programs that provide, a monthly retirement check and health care to older Americans who have worked and paid into this system meaning that they paid those taxes during their working years.

And this tax is only charged on what's called wages or earned income. So your job income, not things like interest or other types of income that you might earn, just money you earn working at a job.

And, of course, you will also pay taxes to the federal government. And every time you get paid, an estimate of those taxes will come out of your paycheck and your employer will send them to the US government as an estimate of the tax you might owe at the end of the year.

Now those taxes are due on all types of income that you may earn. For most of you, it's just your job income, but you may have a rental property or investments or an interest on on a bank account that is also income that you pay federal tax on. And that certainly includes your job income. Now in addition to those, depending on where you live in the United States and what state and even sometimes what city you live in, there may be additional taxes that are due, and an estimate of those also come out of your paycheck. Every time you get paid and they're sent to that state government or that city government as an estimated tax payment for you.

So it's important to understand here in the United States, our income taxes for the federal government, state governments, even local governments, we're on what we call a "pay-as-you-go" system.

So we need to pay an estimate of the tax we're going to owe every time we earn income. So every time we get a paycheck, you'll see some taxes come out for the Social Security tax, the Medicare tax, and those other income taxes that you see on the screen. We're gonna talk more about that system and how it works in just a few minutes on the next slides as we learn how your taxes are paid and how they're calculated.

So let's now take a closer look at either how much or how those taxes are calculated and taken out of your paycheck.

The Social Security and the Medicare taxes are a little bit easier because those are fixed percentages. As you see on the screen, the Social Security tax is six point two percent of the wages that you earn at your job, every time you get paid, which are taken out and sent to the Social Security system. Now there's a limit to how much of your pay is subject to that Social Security tax, and that limit changes every year. You see it on the screen here.

The Medicare taxes, which is a smaller number. It's one point four five percent is calculated on all of your pay no matter how much you might make at your job during the year, but that's a fixed one point four five percent that comes out of your paycheck and is sent to the Medicare system without you seeing that money.

Now the income taxes, you have a little bit more control over. You'll fill out a form w-4, and there's another video that you can watch to learn more about that form w-4 that helps you and your employer estimate how much to take out for your federal income taxes, and there's a similar process to help figure out how much to take out if you're going to owe a state income tax and maybe even a local or city income tax. And then that amount is taken out of each paycheck sent to those government entities as an estimated payment towards your taxes.

And so for now, let's just focus on those income taxes. Certainly, the federal income tax that may be also those state and local taxes if we have them because they work the same way.

There are two steps to the income tax process, and it's really a sixteen month process that we go through every year. During the calendar year, as I earn paychecks, as we've learned, some money is taken out every time and sent to the federal government, actually sent to a agency called the internal revenue service or the IRS. That's the federal government agency that handles taxes. States have their own similar agency that does the same thing. They collect those payments and put them under my name. Remember, those are just estimates of the tax I'll owe. So that's what we see in the blue box here.

And then at the end of the year, I'm gonna fill out a tax return, and we're gonna see that form in just a few minutes, actually, on the next slide. And on that tax return, I am gonna settle up with the government, with the federal government, and maybe my state government. I'm gonna show them how much I actually earned in income for the year. And then there's some deductions and adjustments I can make to that income on the form. And then it calculates how much tax I actually owe for the year.

And we compare that to how much I paid through all those paycheck withholdings that was sent to the government during the year. If I sent them too much, I'll get what's called a refund. They'll pay me the excess amount back. And if I didn't quite pay enough during the year, I'll have to pay the difference. I'll write a check with my tax return to finish paying my taxes for that last year. Now I have an extra period of time. I have until about the middle of April to the next year to finish that process, to fill out my tax return, and settle up with the government.

And remember, the amount that comes out of each paycheck is based on that form w-4 that I'll fill out. So there is a video and you'll see that as a next action item that you may wanna write down from Health Carousel, you can watch that form w-4 video to learn more about how to calculate how much comes out of each paycheck for this process. But what we're gonna do next is look at that federal tax return form and go through it step by step so you understand this sixteen month process that we all go through every year to calculate and settle up our income taxes.

Okay. So we're gonna do that next, and we'll spend about fifteen minutes looking at the federal tax return.

It's called form 1040. If you haven't heard that number, you'll be very familiar with it soon. So let's look at that form 1040 next. Again, this is the federal income tax return that lets us settle up with the IRS to see if we paid the right amount of taxes too much, too little, and then we settle up in one of us writes a check to the other at the end of the year.

And so here's our first look at that form 1040. You see there's a lot of different sections to it. And what we're going to do next is simply walk through this one section at a time so you can understand what information you'll need, what the form asks for. You'll see some sections about deductions and adjustments and credits, and those are things that might be available to you to help reduce your taxes that are due, and then get to that bottom line where we settle up with the government.

If you wanna see this form on your own, you can find it lots of different places, but you, might want to start on the IRS website. Their website is irs.gov, and there's lots of information about income taxes there. But the direct path on that website for the form 1040 is shown here on the slide on that action step that that may be the next action item that you write down is to go find that form 1040, maybe save it on your computer and take a deeper look at that form just like we're gonna do here today.

And so here's that first section. The top of page one of the form 1040. You see it asks for your name and address and a Social Security number, if you have one. It also asks for your filing status what deduction you're going to take or information about the standard deduction, as well as, information about dependents.

Usually that's a child that is still living with you that depends on you for support and income. It could be some other individual that depends on you for support. And there are some tests on whether they're a dependent or not, but you might get some tax benefits, some deductions or credits if you have dependents in your family or in the household. So you'll list those individuals here.

And and so let's talk a little bit more about those two items. The filing status is really a marital status, and that impacts a lot of things on your tax return. The deductions that are available to you, which ones you might qualify for, certain income limits for those credits, and there are several filing statuses available to you. You can pick the one that is appropriate for your situation. You can't pick the one that you like the best. There's only going to be one that applies to you.

And for most of you, you'll pick either single or married filing jointly. So we'll focus on those two. And those are the first two that you see there.

So if you're not married, you pick single. If you are married, you have a spouse, you would pick married filing jointly on the tax return, and then you list your dependents, their name, their age, their Social Security number. Again, those are individuals that are dependent on you financially, probably children but it could be other individuals as well. And if you have dependents, you may qualify for certain credits like the child tax credit, a dependent credit, dependent care tax credit, and several others that may be open that we'll learn more about.

Now as we move down that form 1040, we're gonna see a section that looks at income, adjustments and deductions. And so that finishes page one. Let's look at all of those items on the next few slides and talk a little bit more detail about each of those in turn.

So the first section you'll see there is a list of your income. Very straightforward, and this is really the main purpose of the tax return, the form 1040, is to show the IRS all of the income that you actually earned for the last calendar year, because most of those income items are subject to income tax at the federal government and also maybe at the state level for state government.

Now for most of you, you'll just have one type of income. It's your wages, or your job income, and there's a line to list that income. You'll get a form at the end of the year from Health Carousel, from ADP that shows you how much you earned for the year end wages that you're supposed to put on that form 1040 wage line.

But you may have other income types. Your spouse may have wage income. You'll put that on the same line. You may have interest that you earned at the bank that you'll put as income. Maybe you have some investments or a rental property or some other types of income that you see here. If you have those, you'll list those in the income section of the form 1040, and you'll add those all up together and total those at the bottom of that section.

And then after you total up your income, you'll get to section called adjustments.

These are some very specific reductions that you may be able to take off of your income amount to reduce the tax that you'll owe. Now we'll talk about some other deductions in a minute called the standard deduction or itemized deductions. These are taken before those items, and these are in addition to the deductions we'll talk about next.

Now many of you may find that you don't have any of these adjustments that are available to you. They're there for specific reasons and based on specific types of expenses or accounts that you may use. For example, there's a special medical savings account called a health savings account that you may contribute to or a special retirement account that you may contribute to called an IRA, or an individual retirement account. And if you put money in those accounts, you may be able to take those as a deduction on your tax return. If you pay interest on student loans. If you go to college here in the US, you may be able to deduct some of that interest as an adjustment on your tax return.

And there's about twelve in total adjustments that may be available to you. Every year, you'll look at that list, see if they apply to you. And if so, you put the amount in the adjustment section, and that reduces the income that you have to pay tax on on this form 1040.

But what's available to all of us is what you see next and on this screen, which are your deductions. And you have a choice here to take either the standard deduction or your itemized deductions, and that's a choice you make every year on your tax return. And I'll make it easy. The choice is you get to take whichever one is bigger each year.

Now the standard deduction is easy. That's an amount that the IRS gives all of us. The amount you get is based on your filing status, whether you're single married finally jointly, or some of those others. And if that's the bigger option, then that's what you take, and it reduces your income even further. And you pay a little bit less in income taxes.

But you have an opportunity here in this red box on this slide to look at some other very specific expenses that you might have. And they include things like significant medical and dental expenses if they're above a certain level of income, certain taxes that you pay to state and local governments, if you give money to a charity in the United States, you get a tax deduction for that, and some others that you'll see on the itemized deduction list. You'll calculate all of those. You'll add them together. You may not have any of them. If you do, you add them up and compare them to that automatic standard deduction that we all get, and you see which one's bigger.

So your action item every year when you fill out your form 1040 is to look at that automatic standard deduction, add up any of those itemized deductions you might have, see which box is bigger, and then that's what you put on your form 1040. It's just that simple. And the bigger number is the deduction that further reduces your income that you'll pay tax on.

So just to give you an idea what those amounts look like, the standard deduction is adjusted every year for inflation. It goes up a little bit every year. And again, the amount is different based on your filing status, whether you're single, married filing jointly, or some of the other filing statuses that you see here. HOA is head of household, could use married filing separately, but again, most of you will use that single or married filing jointly filing status.

So you see the standard deduction for two years. Again, you see they go up from one year to the next here on this slide. And that's the automatic deduction you get. You'll use that unless those itemized deductions for you when you add them all together happen to be more than the amounts you see here on the screen.

And then from there, we just continue working through that form 1040. We're getting close to the end of that form. On this section of the 1040, we see a few things. We see taxes, credits, and payments.

The tax section is the actual calculation of how much tax you owe for the year based on your new income number. Remember, we've shown the IRS your income that you earned but we reduced it by some things called adjustments and deductions, maybe that standard deduction, to get to a smaller number. And then there's a calculation you'll do, and you'll probably use some tax software or maybe a tax accountant that will help you with this form, that will help you calculate the actual tax that you owe for the last calendar year.

Now from there, there's another opportunity that's called credits. Tax credits are available for some very specific reasons. If you have children, you'll probably qualify for one or more tax credits. And these are even more valuable than the deduction.

They reduce the tax that you owe dollar for dollar, so if you owe ten thousand dollars in federal income taxes and you qualify for, let's say, a two thousand dollar child tax credit, that reduces the tax you owe from ten thousand right down to eight thousand dollars. And that happens right here on this part of the form.

And then from there, remember, we said we're gonna settle up with the federal government on, our tax form we now show how much we've already paid for the year. Remember those estimated payments that come out of each of your paycheck during the year?

At the end of the year, you'll get a form from Health Carousel from ADP, the payroll provider they use. And it shows you how much you paid the federal government.

And you'll put that amount right here on the form. So you show how much taxes due, take any credits that are available to you as payments, and you show how much you've already paid right here in the payment section of form 1040.

So there's only one section of that form 1040 left, but before we get to it, I wanna talk for a few minutes about that tax calculation. Because you're all probably very curious how much tax do I actually have to pay on the income that I'm gonna earn while I'm here in the United States.

What you see on this screen gives you some idea what those percentages are, but it's important to understand that the US federal tax system, and it's the same for most states that you might live in if they have an income tax, is what we call a progressive taxes. And what that means very simply is that as you earn more income, that additional income you earn is taxed at higher percentages at higher tax rates. But it doesn't mean that all of your income is taxed at a higher rate.

So let's say for a minute, you're single and you make seventy thousand dollars in income. Well, if you look at the table on the screen, you'll see the first part of your income that you were in, the first part of that seventy thousand is taxed at just ten percent.

The next portion of your income is taxed at the next bracket, the twelve percent.

And then as you earn more, just that additional income is taxed at the next rate, right now, is twenty two percent.

So when you look at the total tax that you owe compared to your income, you might find that the tax you owe is about thirteen or fourteen or fifteen percent of your income because some of it was taxed at ten percent. Some of it was taxed at twelve, some of it was taxed at twenty two. And if you earn more income, you'll see you'll go down that scale but we all start at the lowest bracket for part of our income and move through those brackets just for the next part of income that we earn. That's why the tax calculation is a little difficult to do, and you might use some software to help you with it. But it's a valuable system in that just because you earn more income, it doesn't mean all of it is taxed at some higher percentage. We all start at the lowest levels, and then as we earn more, just the next piece of our income gets taxed at some higher rate.

And so you see those income ranges if you're single they're different if your filing status is married filing jointly, and those income ranges go up every year. So you see those here. And you'll see on the next slide, just exactly how those change when we look at the next year and those same income ranges for married filing jointly or single are adjusted for inflation. And that happens each and every year. We get a new version of this tax bracket table. So before we look at that final section of the form 1040, let me just go back to that thing that I described earlier called credits.

Remember the last section of the form 1040, we calculated how much tax we owe, and then we might get to subtract these things called credits, and then we also show the IRS how much we actually paid through our paychecks for our estimated tax during the year. Well, these credits are very valuable. As I said, they reduce your taxes by on a dollar for dollar basis if you qualify for a credit. Many of the credits are based on having dependents, probably children. It could be other individuals.

Or if you have a child at home, you may get a child tax credit that's worth somewhere around two thousand dollars per child that you can use to reduce the taxes you owe.

If you pay taxes to another country, you get what's called a foreign tax credit. So you don't have to pay taxes to both countries. If you have income that's subject to tax in another country and you pay tax to them, you could take a credit for those taxes paid on your US tax return.

There are also some credits if you pay for college for yourself, or dependent, or a spouse here in the United States that may let you take some additional money off your taxes due as a credit. Two of those are called the American Opportunity Tax Credit. And the lifetime learning credit.

So every year, you'll explore that list of tax credits available, see if any apply to you. Again, you might use tax software, or a tax preparer to help you with your tax return, and they'll explore those credits with you to see if any apply to help reduce your income tax.

And then finally, we get to the end of that form 1040, the bottom of page two, and this is where we settle up with the IRS, with the federal government. That's the process I described earlier in today's session.

We're through this form. We show the IRS all the income I earned for the year., any deductions or credits or adjustments that might be available to me, and I put those on the form, and then I reduce my income, and I reduce my income tax with those deductions and credits. Then I get down to the actual amount that I owe. And then I show the IRS on this form how much I actually paid already.

So maybe I owe ten thousand dollars for the year. Turns out through all my paychecks, I've sent you eleven thousand dollars straight to the IRS. Well, I paid too much. And this is where we settle up. I paid you, I owe you ten thousand dollars, but I paid eleven, so I will get what's called a refund. The IRS will send me a thousand dollars back because I paid too much in taxes during the last year. And we've just settled up, and I'll get that money back.

If I owe ten thousand dollars and I only paid in nine thousand during the year, then I have to write a check and pay the remaining tax due, that remaining one thousand dollars with this tax return by the middle of April next year.

So I might get a refund. I might have some money due with my tax return, and that's very normal. And every American has one of those two results when they do their tax return.

And I'll tell you that a lot of people like to get a refund because it feels good. Right? The federal government's gonna send me some money back. That feels better than having to write a check with this tax return. But let's talk more about the pros and cons of getting a refund versus having to write a small check to finish paying my taxes.

Now remember once again, that form w-4, and I've mentioned that many times. When you start your job, you'll fill out the federal form w-4 that helps your employer know how much to withhold as an estimated tax and send to the federal government, to the IRS and maybe to your state government and maybe even a local government.

That's your estimated tax payment, and that helps determine at the end of the year whether you paid too much or too little, and whether you'll get a refund with your tax return.

As I said, a lot of Americans like to get a refund, it feels good. But what that really means is during last year, every paycheck, you sent a little bit too much to the government, and they held on to it for the year until you settle up with them on your tax return, and you find out you paid too much and they give it back to you.

So you may look at it as a way of just setting some money aside every paycheck, letting the government hold it, and then at the end of the year, they'll send it back to you in one big check. And you could use that to take a vacation or to pay off some debt or do other things. And a lot of Americans will do that because it's nice to get that big one time lump sum check. Feels like you did something right, but what it really means is you gave the government too much every paycheck.

So the downside of that is every paycheck you could have had a little bit more money to spend, but you sent a little bit too much to the federal government. So if you reduce the withholding amount you send to the federal and state governments by changing that form w-4, you'll get a little bit more of your paycheck that you get to keep. You'll send it a little bit less to the government, but when you fill out your tax return, you might find you get a smaller refund. You might actually have to owe a little bit but you may be okay with that because you got a little bit more in each of those paychecks during the year instead of letting the government hold on to that money until the end of the year.

So we have some control over whether we get a refund or we owe a little bit with our tax return through that form w-4.

I wanna mention one other thing because you might be thinking, I'm gonna send just smallest amount possible to the federal government in each paycheck so I have a lot more to spend every time I get paid. And I'll just write a big check at the end of the year when I fill up my tax return. The federal government says if you didn't pay at least a close estimate of what you actually owe us, we might charge you a penalty. So if you owe us ten thousand dollars and you've only paid three thousand during the year, you'll have to write a check for seven thousand dollars, but we might charge you a penalty because you weren't anywhere close. We need you to be close with your estimate, and if you're off a little bit, we'll give you some money back, you'll have to pay us a little bit. But the IRS, the government wants to see that your estimated payments were somewhere close to what you actually owe, and you can work with a tax accountant to help you figure that out. But that all comes from filling out that form w-4 correctly so that your estimated payments are close to what you'll owe at the end of the year.

So we've now been all the way through that tax form for the federal government, the form 1040. We've learned a little bit more about how US taxes work. And we know that every time we get paid, some money will come out of our paycheck that we won't get to see that is used to pay that social security tax, the Medicare tax, an estimate of our federal government taxes, maybe our state government and local government taxes, but there are some things you can do with your pay that will reduce the taxes you pay.

And there are a few examples on the screen here that I invite you to learn more about, and that may be your next action item.

As you get paid and earn an income at Health Carousel, or other jobs here in the United States, you could choose to save some of that pay for your retirement in a special account called a 401k.

You're very likely to also choose to sign up for health care coverage as part of your job for yourself and for your family, and you will pay premiums for that health care coverage, the cost of having that coverage.

And depending on which health care coverage you choose, you may also have access to a special savings account for health care costs, called a health savings account. Any part of your income that you use to save for your retirement or to pay for health care costs, or for that special healthcare savings vehicle, those amounts of your income are not subject to federal income tax.

In other words, If I make fifty thousand dollars and I use ten thousand of my income to save for retirement or to pay for health care, or to save for future health care costs in that HSA, those things are mine, and I get some value for those, but the amount of money I used for those items are not subject to tax. So on my tax return, when it asks for my income, I won't write fifty thousand dollars, even though that's what I earned, I'll show forty thousand dollars because the amount of money I used for these special accounts and these special purposes is not subject to income tax. So if you use these, it has the added advantage of reducing the tax that you'll owe at the end of the year.

As we approach the end of this session, I wanna talk a little bit about this process of filing your tax returns and getting ready for that process. I said earlier this is a sixteen month process.

At the end of the calendar year in December, you should start thinking about how you're going to get help with those tax returns. You can use software that you can buy. You may hire a tax professional that will do those tax returns for you for a fee. You may decide to try to fill those out yourself. So you start to look for those options in December.

And then when January comes, you'll get the the important forms in the mail that you need to fill out those tax forms, including the form w-2 from Health Carousel, from the payroll provider they use, that will tell you how much income to put on the tax return, which may be reduced by some of those special things we talked about like saving for retirement, or paying for health care costs. It will also show you how much money you paid already for federal taxes and for state and local taxes, and you'll need that information when you settle up with the government on your tax forms.

February to March, you'll spend time filling out those forms.

Those forms are due April fifteenth. And if you don't file those forms by April fifteenth and pay any final tax that is due, you may have a penalty. You can file an extension to get more time to fill out the forms, but you still have to pay any tax that might be due by April fifteenth. So you have to have a good idea how much you'll owe by then anyway.

So the first three months of the year, you're collecting those forms, filling out your tax forms, and hopefully filing those maybe with some help by April fifteenth.

And while that's the federal income tax process and timeline, it's very similar for any state or local taxes and tax returns that you may be responsible for filing. Most states have the same deadline to fill their forms out by April fifteenth. It's the same process. We're settling up with the state government. If there is an income tax due, you've paid it throughout the year. At the end of the year, you show them all your numbers, you figure out how much you actually owe compared to what you already paid, and the state government may give you a refund if you paid too much or you may have to pay a little bit extra to finish paying your taxes for the year if you didn't pay enough during the year.

There are some cities in this country that have their own income tax, and you'll go through that same process again with them.

Finally, and let's look at some resources available to you. I mentioned the website irs.gov. That's the federal income tax website for the IRS or the internal revenue service. Again, that's just the agency that manages and collects taxes from us for the federal government. And you can see here there's a direct path to look at that form 1040 and then the instructions for the 1040, some additional information about international employees, that form w-4. There's also a webinar through Health Carousel about the form w-4 so you can learn more about how to fill that out correctly so your taxes that you estimate during the year and pay are very close to being accurate.

So make sure you look at that form w-4 video as soon as you can because that is one of the first things you'll be asked to do when you start working here in the US.

I also said you may choose to get some help filling out all of these tax forms. As much as you've learned today, it's a complicated process. One of the resources that you could choose to use that is made available to you by your employer here is called EY taxchat.

EY taxchat is a tax preparation resource that is done all digitally, but with an individual from EY that will prepare your tax return forms for you. So it's a digital on demand service that you can access through your phone or on a website, that connects you with an EY professional, where you can answer some questions, share your tax documents, and information about your income, and your family situation, you can chat with them through the website or the app.

If they have questions, they'll come back to you and ask. They'll collect your documents by just having you take pictures of them on your phone, and then they will fill out your federal 1040, any state or local tax returns that may be due, and they'll share those with you when they're done. You get a chance to look at those, and then you can pay the fee that's needed, to finish the process for EY taxchat to complete those forms. And then they will file those with the government entities electronically. You never have print them or see them or mail them in.

That is one of many tax preparation services that are out there and available to you. They all do have a cost to them. But as you'll see next, EY taxchat does have some discounts available through your employer here if you choose to use EY taxchat.

And I do wanna show you just in a different way here what that process is because the next action step you write down might be to find EY taxchat in your App Store on your phone and download it.

And when you get to January of next year after you've worked in the US and you're ready to do your first tax returns, you might go through the process on EY taxchat because you can use it and see how it works without having to pay anything upfront. You'll simply create a login and answer some questions about your family situation, what kind of income you have. You'll get a tax or a a fee quote for the tax returns based on that information. So you can decide if you think that's reasonable.

If so, you'll meet your EY tax preparer. You'll chat with them. You'll share your documents. You'll take pictures of them. They'll prepare your tax returns. And only then, if you decide this was a good process and the fee is fair, will you pay that fee, and then they will let you approve the returns, and they'll file the tax returns for you. So, again, another action item to consider is to download taxchat and consider it as one of the options to get your income taxes done each and every year.

Oh, and by the way, I did say that there are some discounts available for EY taxchat. There's actually two available to you. If you pre register on that taxchat app by December thirty first of any year, you'll receive a hundred dollar count if you decide to use EY taxchat to do your tax returns for that year.

And when you register on the app, it'll ask for any codes that you might have. If you type in healthcarousel50, when you sign up on EY taxchat, you'll also get a fifty dollar fee to lower the tax preparation fee that you'll have to pay, and that fifty dollar fee is paid by your employer.

So you can save up to a hundred and fifty dollars off the cost of EY taxchat helping you to do your tax returns including your federal return and any state or local returns that are due if you follow these guidelines and use that code when you sign up for EY taxchat.

So now we've reached the end of the presentation. Again, I hope you've learned a little bit more about how taxes work in the US.

I told you upfront that the most valuable part of this session is right now when we're all done, and you get to decide what you might do next with this information. So think about what help you might need to fill out your tax returns every year. Make sure you learn how that form w-4 works and what it's all about by watching the video. Make sure you complete it correctly and early in your process as you work here in the US.

Look at the other resources we shared with you, learn more about the form 1040 and any taxes that might be due in the state that you live in or the city that you live in. By the way, if you work in different states during the year, you might have to pay taxes to multiple states and EY taxchat or other tax preparation services can help you with those as well.

So organize your list of action steps, make sure you do some of those, make sure you ask more questions as you learn more about how the US tax system works. But most importantly, welcome to the United States. Congratulations on your new job. I hope you have a wonderful time. I wish you the best of luck, and we'll talk again soon. Thanks.

Watch Next:

Completing Form W-4

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