What is a Tax Return?
A tax return is a report filed with the Internal Revenue Service (for tax returns filed within the United States) or with a local tax collection agency that delivers information used to decipher and calculate income tax and other taxes given an individual’s financial situation.
Tax returns are typically prepared using forms prescribed by the Internal Revenue Service or other applicable taxing agencies in the United States.
In general, three outcomes are possible for filing a tax return: the taxpayer has either been charged too much or too little for their income earned (the amount withheld exceeds their obligation) or they have been charged the correct amount. If an excess of funds is present (common examples include an employer withholding wages), the government must refund them, whereas if they have been charged too little, the individual taxpayer must makeup the difference.
Tax returns are used to organize, compute, and deliver an individual or corporate taxpayer’s obligation. The typical or normal deadline by which an individual must file their federal tax return for a given fiscal year is April 15th of the following year.
Based on the Internal Revenue Code, tax returns are classified as either information returns or tax returns. In the more specific sense, tax returns are reports that list all tax liabilities and payments. In most instances, tax returns contain all viable and pertinent financial information that is necessary to compute the individual’s or underlying organization’s tax return.
Information returns are forms of federal tax returns used to transmit information concerning income, receipts, or other matters that may affect a taxpayer’s liability. Examples of these tax returns include the W-2 Form and Form 1099, which are both used to report the amount of income that an employer, broker, independent contractor, other entity pays to a taxpayer.
All individuals who earn an income in the United States are legally obligated to file Federal tax returns. The standard individual tax return in the United States is the Form 1040; there are several variations and chapters within the 1040 as well numerous supplemental forms.
All tax returns may be filed individually or as part of a family (known as a joint tax return). Married couples may to choose to file separately or together depending on what best suits their incomes. Children under the age of 18 may be considered dependents based on United States tax law. This status simply means that their income and allowable deductions are included with their parents’ tax returns.
The governing body in charge of the levy is responsible for issuing tax return documents to all its taxpayers.
In the United States, tax returns may be filed by an individual with the help of a certified public accountant a tax accountant, or by utilizing a specialized computer software program.