Your tax payments and refund will be based on your taxable income. Your taxable income and your total income are different, as not all of your income will be taxed by the government. When filing your taxes, you can choose between a standard deduction and an itemized deduction.
A standard deduction is a set amount of your income that will not be taxable, while an itemized deduction is a manual list of deductions made to your income by you based on your expenses.
For example, the standard tax deduction for a single person is about $12,000 of their income, but an itemized deduction can be more or less depending on an individual’s expenses throughout the year.
The standard tax deduction for seniors has risen over the years, so it is recommended for senior citizens to choose standard tax deduction when filing for a tax return.
However, if you think you will have a greater deduction if you do an itemized list of your tax-deductible expenses, such as charitable donations, be sure that it will be more than the standard deduction as you will only be allowed to pick one.
Once you have filed your tax return, you will be required to pay the taxes you owe the IRS or be offered a tax refund. You will usually receive a refund within 21 days of filing your tax return, but this may vary depending on how quickly the IRS can process the returns.
If you need to pay the IRS instead but cannot pay in full, you will be given up to 120 days to pay the full amount. You may even choose to pay in installments or through your employer’s payroll during your 120 day payment extension.