For some, taxes are fairly straightforward. They have been working for a company, getting an hourly wage. They have just one source of income. They’re young and single, and their taxes get taken out of each paycheck before they get it. All they have to do is report their overall earnings to get a refund.
For others, though, things can get very complicated in a hurry. Rather than getting a refund, they may owe a significant amount of money. Some things that make returns more complex are:
- If you make money from multiple sources
- If you are a contract worker, not an employee
- If, rather than holding a job, you run your own company
- If you itemize your deductions instead of taking the standard deduction
- If you earned money overseas
- If you have complex assets, like investments, stock and ownership in a company
- If you have failed to file in previous years
- If you have missed the deadline — though it has been extended to July 15 in 2020
- If you were supposed to pay estimated taxes over the year and failed to do so
All of these situations are unique and come with their own questions, and you could be facing more than one. For instance, maybe you are a business owner, you are supposed to pay taxes during the year, and you earned money overseas — as well as in the United States. Even just running a small business can make the whole process very complex. It is important that you fully understand the legal steps you need to take when you file.