Tax Day 2025 is quickly approaching, so in preparation, here’s some frequently asked questions answered!
What are taxes?
Taxes are mandatory charges to individuals and businesses from the government. Money can be owed to local, state, and national governments. The government(s) charges taxes differently depending on your city, county, or state within the United States.
When are taxes due?
The 2025 Tax Day is April 15, 2025. Tax Day typically falls on April 15th, but depending on weekends and holidays, the deadline can be extended.
How do I pay taxes?
There are a few avenues to pay, but the IRS provides resources on how to file taxes here.
Why do we File Taxes?
Filing taxes is a civic responsibility. Every year, businesses and individuals across the country are required to report their income and expenses to the Internal Revenue Service (or IRS). As an individual filer, taxes help to determine whether you owe money to the government or if you’re eligible for a refund based on the amount of taxes that have already been withheld from your income during the year.
Taxable Income
Federal income taxes are charged only on taxable income. This includes earned income (the money you get in exchange for work) and unearned income (money you didn’t explicitly do something at the time to get, such as investment gains or interest). Things that don’t count as taxable income include child support payments, life insurance payouts, and scholarships. For more information and specifics on what qualifies, check out the IRS’s write-up on the topic.
Paying Federal Income Taxes
All federal income taxes must be paid by Tax Day, on or near April 15th, every year. If you work for an employer, they will generally withhold federal income taxes from your paycheck, according to the withholdings you select on your Form W-4.
If you’re self-employed and made over $400 in net income after expenses, you’ll need to take care of federal income tax yourself. To do this, you’ll make quarterly payments to the IRS. These payments are based on what you think you’ll make during the year. They also need to account for your share of Social Security and Medicare, since you don’t have an employer to take those out or contribute to it for you. To learn more about how being self-employed impacts your taxes, read this article by the IRS.
Understanding Brackets
Federal income tax is taxed progressively. This means that the government creates brackets, or categories, and the income level that falls into each bracket is taxed at a specific percentage. Even if you fall into the highest tax bracket, that doesn’t mean all of your income will be taxed at the highest rate.
The percentage from each bracket is then added together to get how much you owe in federal income taxes. Check out this Banzai article to learn more about tax brackets.
Do I need to keep a record of my past tax returns?
You should keep a record of past tax returns in case the IRS (Internal Revenue Service) or your state government has questions on any past information you’ve submitted. If they have questions, this could lead to an audit, where the government reviews your tax return to make sure you complete it correctly. Generally, it is a good idea to keep a record of past tax returns for at least three years, but an audit can go back six years. There is no time limit if the IRA suspects someone has committed tax fraud.
When it comes to filing Taxes, don’t stress! This guide can help answer some questions you have about Tax season, but don’t forget to file by April 15th!
Disclaimer:
While we hope you find this content useful, it is only intended to serve as a starting point. Your next step is to speak with a qualified, licensed professional who can provide advice tailored to your individual circumstances. Nothing in this article, nor in any associated resources, should be construed as financial or legal advice. Furthermore, while we have made good faith efforts to ensure that the information presented was correct as of the date the content was prepared, we are unable to guarantee that it remains accurate today.