Track Any Stock Instantly
Just enter up to ten of your stocks in the Stock Tracker box, click the ADD
button beside any of Today's Hot Stocks, or click ADD beside any of the stocks
you've Recently Viewed.
Click ADD next to any stock below to add it to the Stock Tracker
Tax Basics
Introduction to Taxes and Basic Information
by InvestorGuide Staff (Write for us!)
(Click on a link within the article to get a definition of that word)
You might think that taxes are a necessary evil better left
for professionals, but understanding the basics can help you minimize the total amount of taxes that you pay.
When planning for taxes, we usually think of the Federalfiling deadline of April 15, however, you are required to pay taxes throughout the year. Paying the right amounts throughout the year will save you from having to pay penaltycharges for underpayments.
For most of us, the payments we make throughout the year are made on our behalf through our employers. Employers automatically withhold taxes from our gross earnings before giving us our netearnings, the little numbers on our paychecks (or big numbers for you lucky ones). Your employer is also responsible for reporting your total income and taxes paid by submitting form W-2 to the IRS. You must then file your taxes-which tells you the total amount of taxes owed and the total amount of taxes already paid-and either pay the difference (if your automaticdeductions were too small) or collect the difference (if your automatic deductions were too
big).
You may have heard before that you should contribute the maximum to your 401(k) retirementplan. Doing so will let you defer the taxes you pay on your contributions and will allow your contributions to increase through compound interest. Adjust your withholdings if your marital status changes or if you are in a different tax bracket than the previous year. If sufficient taxes are not withheld from your paychecks, or if you are self-employed, make estimated
tax payments to the appropriate taxauthority to avoid year-end penalties.
How to use this tool 
How to use this tool 
Email this Article
Print this Article
Cite this Article
