This was sort of what I did today. Except, being German, my taxes are different. I guess.
Let’s start with a few explanations: I am working full time, so my employer deducts my taxes directly from my salary. Taxes, payment for some social security stuff. They don’t deduct health insurance stuff because I’m in private healthcare. So in fact they pay me a little more because they’re obligated to pay half of my health insurance costs. To a certain degree.
The biggest chunk they keep from my salary is the earnings tax or Lohnsteuer.
They give that directly to our equivalent of the IRS, the Finanzamt.
Since the taxes of employees are paid in advance, we have up to four years to file our taxes, depending on the exact situation, which I wont bore you with. But because I hate keeping track of documents and want it to be done as soon as possible, I usually do it end of February every year.
My Einkommensteuererklärung (literally income tax statement). I could do it by hand, filling in forms the Finanzamt provides, but I prefer to do it via a software that costs me 15 bucks a year. If I wasn’t so bad at keeping track of certain invoices, I could claim a refund for that, too.
The software tells me where to find the information on the paperwork I get from my employer, so most of it is pretty easy to fill.
I tell the Finanzamt how much money I made. How much in income tax and church tax my employer already paid. How much money went into benefits. How much money they gave me to cover costs driving to and from work.
Then I have to tell them (and in some cases file receipts) about my professional expenses or Werbungskosten. Which is a nasty words because it translates to advertising cost and should be Erwerbskosten. Costs related to me making a living.
Clothes or work materials I have to by, travel expenses for business trips, that sort of stuff.
Any other tax allowable expenses like certain types of insurance, maintenance costs for my living arrangements, costs related to the care of sick or old relatives, etc etc etc.
Why we do that? Well, in my case, in a few weeks or months, depending how busy the Finanzamt will be, I will get what we call a Lohnsteuerrückzahlung. An income tax refund. I’ll probably get mine in April or May.
This year I’m expecting something in the very low four figures, which is pretty good.