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Chris: This is the Penny Forward podcast, a show about blind people building bright futures one penny at a time. I’m Chris Peterson. Liz Bottner and MOe Carpenter couldn’t be here for this recording session. It’s tax time, and during tax time, many of us wonder why we pay taxes, and what the best way is to go about filing our tax return. Fortunately, Penny Forward offers an online course that covers this subject very well, and I thought today, I would take you on a quick tour through that online course, to talk to you about what it covers, and hopefully give you some information that you can use when you do your taxes. Let’s get started right now.

Chris: The first module in the course is all about important concepts. It explains the how and the why around taxes. It starts out by talking about withholding. When you get paid by an employer, part of your paycheck is withheld by your employer and paid directly to the IRS, and to your state’s department of revenue to pay your taxes. When you do your tax return, you are essentially trying to figure out whether too little or too much was withheld from your tax return. If your employer withheld too much, you’ll get a tax refund at the end of the year. If your employer withheld too little, you’ll owe money and you’ll have to pay some of it back. There are a few different things that are withheld from the common paycheck. The first one is called FICA. FICA is about 7.65 percent of your paycheck, and it’s withheld from everybody’s paycheck. It pays for social security and Medicare, and you will get that money back when you start collecting social security benefits, when you retire, or if you lose your job and start to collect social security disability benefits.

Next, federal taxes are withheld. And federal taxes range from zero percent to above thirty percent, depending on how much money you make. If you make more money, you’ll pay more in taxes. And that’s where tax brackets come in, and that is the next lesson in the course.

So tax brackets are a system that are designed to make it so that higher earners pay more in taxes. As you earn more money, you fall into higher and higher tax brackets, and uh, therefore, you pay more taxes. But it’s not as simple as that. Tax brackets are referred to in terms of percentages. For example, a lower income earner may be in the ten percent tax bracket, and someone who earns a little bit more may be in the twelve percent tax bracket. But the person in the twelve percent bracket is not taxed on twelve percent of their income. Instead, they are taxed on ten percent of part of their income, and twelve percent of another part of their income. The tax bracket system is a little bit complicated, and the course covers this in a simple way, with examples, that help you to understand how exactly tax brackets work.

The next lesson is tax credits. Tax credits are a big deal, because they remove money from the taxes you owe. If you, for example, are able to collect a five thousand dollar tax credit, that means you owe five thousand dollars less in taxes. And this lesson explains that, again, with examples. We also talk about tax deductions. Tax deductions reduce your taxable income, but they don’t reduce your taxes as much as tax credits. So they’re desirable, but they’re not as desirable. Many people will claim the standard deduction, which is something that’s available to everybody, and makes it simpler to file your taxes. For example, if the standard deduction is twenty thousand five hundred dollars, then, you can reduce your taxable income by twenty thousand five hundred dollars. And many people choose to do that, but some people choose to itemize their deductions, meaning that they don’t take the standard deduction, and they deduct their expenses instead. This usually only makes sense if your expenses are much higher than the standard deduction, but for some people, they might be. Especially if you have very high medical expenses, education expenses, etc.

The next lesson explains tax refunds. And I explained it to you pretty succinctly at the beginning of the podcast by saying that, if your employer withholds too much, when you file your tax return, you’ll get a tax refund. But tax refunds aren’t only available to people who have a job. Some people who don’t have a job may be able to receive fully refundable tax credits, which could entitle them to a refund. So you may want to file a tax return, even if you don’t currently have a job.

The next module covers filing a tax return. It starts out by answering the question, “Who needs to file a tax return?” And the answer is, “People who are working, and making over a certain amount of money. However, a lot of people who don’t need to file a  tax return may want to file a tax return anyway, because, as I mentioned before, you might be entitled to tax credits that could get you a tax refund even if you haven’t paid a lot into the tax system.

The next lesson covers what you’ll need to file a tax return. Uh, you’re going to need records of the income you earned, you’ll usually receive this from the company that you work for, uh, companies that paid you interest on investments, or on bank accounts, and, uh, sometimes if you make money gambling or other things, you might also get, uh, tax forms related to that too.

You’ll also need forms that explain what some of your expenses are. For example, if you have a home mortgage, you may be able to deduct your mortgage interest from your taxable income, and reduce your taxes. So, your mortgage lender will send you a tax form as well. This lesson has a pretty complete list of the types of forms you might need to pull together in order to file an accurate tax return.

The next lesson talks about how long it will take. And the answer to that question really varies from person to person, but, uh, if you’re wondering, maybe you’ve never done it before and you wonder how much time you should set aside, this will help to explain that.

Then, we talk about how much it will cost. And again, the answer to this question varies a lot from person to person, depending on how complicated your tax situation is, but we give you give you some general rules of thumb here that you can live by, if you haven’t done this before, and you’d like to know how much it will cost. Another tip, if you are a low income person, you may be able to use a tax volunteer in order to help you do your taxes for free.

The next few lessons talk about how to actually file your return in many different ways. Starting with do it yourself options, including using paper forms, which are available in braille, or using online tax preparation software. And the final few lessons talk about professionals that can help you do your tax return.

We start by talking about non credentialed tax preparers. These are the kind of people that you’ll find in tax prep stores that open up during tax season, such as H and R Block or Jackson Huett.

The IRS also accredits enrolled agents. These are people that are very familiar with IRS rules and regulations, and can prepare your taxes regardless of the complexity of your tax situation.

Many people are familiar with certified public accountants, or CPA’S, and while not all CPA’S are tax preparers, and not all tax preparers are CPA’S, some CPA’S do focus on taxes. But they can also focus on keeping your business books. Keeping complicated personal books if you need to do that, and uh, other kinds of accounting scenarios. CPA’S should be able to cover more complex tax situations. They also might be more expensive.

And finally, there are tax attorneys. If you’re having a legal problem regarding your taxes, you may need a tax attorney. Tax attorneys can also prepare your tax returns, if you need somebody with a legal expertise to do that. However, tax attorneys are also going to probably be the most expensive of the four options. So, unless you have very complicated tax situations, or you’re having a legal problem that you need help with, a tax attorney may not be a great choice for many of you. Still, a tax attorney is going to have an expertise that any of the other three options may not have.

Finally, the course ends with a course satisfaction survey, because we want to understand whether we’re providing information in a way that helps you to better understand how to do your taxes and how the tax system works. If we haven’t done our job, let us know, because we do want to try and make it better. And you do have the opportunity during the course satisfaction survey to provide us with suggestions.

As with all of our courses, the course starts out with a pre-test which helps us understand what you already knew before you started the course, and also helps you to understand what you already knew before you started the course. Each lesson has a short multiple choice quiz that you can take to make sure that you learned the material in the lesson before you move on to the next lesson, and the course ends with a final exam, and when you pass the final exam, you will receive a downloadable, printable certificate that you can use to let everybody know that you have taken our Taking On Taxes course.

So this is a brief overview of the Taking on Taxes course. We have other courses available if you have other needs, such as “Digging Out Of Debt.” If you are trying to work your way out of a lot of overwhelming debt. Or “Concerned about Credit,”  if you would like to wisely use credit, and make sure that you don’t get into overwhelming debt in the first place, and we’re continuing to add more.

This all costs 9 dollars a month, or 99 dollars a year, if you join Penny Forward, and in addition to these online courses, you’ll get access to our weekly members only group chats where we cover financial topics of interest to the blind community. We also provide a weekly newsletter that ties all of this stuff together, and you will get early access to all of our podcast episodes. You’ll be able to listen to them a week before everyone else. Oh, and I forgot to mention. If you’re not able to make the weekly members only group chats live, they’re all recorded. So you can go back and listen to them on your own time. We’re continuing to add more and more member benefits to pennyforward.com so I hope you will go to pennyforward.com and click on the “Join Penny Forward” link today. And while you’re there, I hope you’ll make a donation to support our important work. We suggest around fifty dollars, but it’s entirely up to you.

Chris: That concludes this episode of the Penny Forward Podcast. The Penny Forward Podcast is produced by Chris Peterson and Liz Bottner with assistance from MOe Carpenter. Audio editing and post production is provided by Brynn Lee at

superblink.org

and transcription is provided by Anne Verduin. The Penny Forward podcast is a show about blind people building bright futures one penny at a time, comes out every two weeks, and we hope that you will place a review, however you listen to your podcast, and that you’ll tell your friends about it. For all of us in the Penny Forward community, I’m Chris Peterson. Thanks for listening, and have a good week.