1. 16th Amendment to US Constitution
The Congress shall have power to lay and collect taxes on incomes,
from whatever source derived, without apportionment among the
several states, and without regard to any census or enumeration.

3.  Citizens
◦ pay income taxes based on
the $ earned
◦ take deductions based on $
spent on deductible items
(according to tax laws)
◦ Complete the tax return form
 Taxpayers are legally
responsible for
◦ Accurate record keeping
◦ Filing a tax return on time
◦ Paying any additional tax due

4.  Record of Earnings
◦ W-2 (from
employer)
◦ 1099
◦ Interest Earned
◦ Dividends Earned
◦ Business Profits  Deductions for
Expenses
◦ Dependents
◦ Interest paid
◦ Taxes paid
 State, federal (IRS),
property
◦ Dependent care
◦ Medical Expenses

5.  Individual  Business
◦ 1040 EZ ◦ 1120
◦ 1040
◦ Business Schedules

6.  Download forms
from the IRS
 USPS has paper
forms  Can I complete
 Paid tax preparers return myself?
provide forms  YES
◦ Liberty Tax ◦ IRS website has
◦ H&R Block tutorials
◦ Local individuals ◦ Software available
 Turbo Tax
 H & R Block

7.  Federal Tax Return
 NC Tax Return
 April 15th following
end of calendar
year (December 31)

8.  Federal Return  State of NC Return
 Internal Revenue  NC Department of
Service (IRS) Revenue
◦ Raleigh, NC
 Not all states have
state income tax
◦ Ex: Florida

9.  Do I get a refund?
◦ Deductions from
paychecks for income
taxes are estimates &
paid into your IRS account
◦ Actual $ owed is
calculated at end of year
based on deductions
◦ IF your tax due is MORE
than you paid in during
 Who issues Refunds? year, you OWE the IRS.
 Federal ◦ IF your tax due is LESS
◦ The US Treasury than you paid in during
Department year, the IRS OWES you.
 State
◦ NC Department of
Revenue
◦ Other state tax offices

10.  What if I do not file
a tax return?
 Subject to state &
 Not paying the federal laws
taxes that are due ◦ Fines
to the government ◦ Interest charges on
 Lying about amount money due
 Not filing return at ◦ Imprisonment
all

11.  Tax returns are
subject to audit
 May be charged
with tax evasion