Filing For The First Time?
By Sylvia Cannon
Winter 2006-07
Since you’ve started earning money, you will be responsible for paying taxes on that income. In fact, you began paying taxes with your very first paycheck.
This is where IRS Form W-4 form comes in. When you began your military service, you completed Form W-4, which included your statement about how much federal tax to withhold from your paycheck. The number of withholding allowances you entered on your W-4 will determine the amount of your tax refund or how much you'll owe the government every year.
When tax time comes around, if you did not have enough money withheld to pay for the tax you owe, you will be responsible for paying the remainder due. If you had too much withheld, you will receive a refund.
The withholding amount taken from your paycheck may not cover bonuses, benefits or other types of income. It is possible that you may still owe tax to the IRS even after you have paid in the withholdings from your paycheck.
Additionally, it may be a good idea to set aside money to pay your state or local taxes on your own.
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Sylvia Cannon, a retired Air Force logistics officer and spouse of an active duty Army officer, has been an H&R Block office manager for six years. H&R Block’s 12,500 retail tax offices nationwide can assist service members with any tax or financial concerns. Call 1-800-HRBLOCK or visit www.hrblock.com to find the nearest location.