Step-by-Step
Learn about Income Types and Tax Withholding >>
Know about Types of Taxes on Wage and Salary Income >>
Learn about Tax Reporting >>
Withholding Agents or Payers
- Reports income paid and tax withheld
- Reporting documents: W-2, 1042s, 1099, 1098-T
Individuals (Annual Tax Returns)
Determine actual tax liability on income and compare to tax withheld
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- Over withheld = Refund
If taxes withheld are more than the tax liability, a refund is due.
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- Under withheld = Taxes Owed
If taxes withheld are less than the tax liability, taxes are owed and a tax payment is due.
Important Rule to Remember
ALL U.S. SOURCED INCOME IS SUBJECT TO U. S. INCOME TAX AND REPORTING
Unless:
- Exemption under Income Tax Treaty
- Exclusion under the U.S. Tax Code