A tax return is a document filed with state or federal authorities that declares taxpayers’ responsibility to pay taxes, based on their annual income. It can result in the taxpayer being charged too much or too little, and deductions can be confusing. Tax returns must be filed annually and can be done individually or on behalf of a family. The government body in charge of handling taxes issues tax return documents, and citizens can file taxes with the help of an accountant or specialized computer software. Despite the fear associated with tax season, taxes are necessary for a civilized society.
A tax return is a document filed with state or federal authorities that declares taxpayers’ responsibility to pay taxes, based on their annual income. There are three possible results when filing a tax return: the taxpayer has been charged too much or too little for their income, or they have been charged the correct amount. If they have been charged too much, the government must reimburse them, while if they have been charged too little, they must pay the difference.
Tax documents are often extremely complicated forms that frustrate many people. In addition to the fairly basic principle of adding up your annual income and determining if you’ve been taxed the correct percentage, they also include addition or subtraction for certain actions. In the United States, for example, families can take deductions for dependent children or to finance a college education. Self-employed workers can also deduct work-related expenses as part of their rent or gas mileage. Deductions can help increase your government yield or lower your pay, but they can be very confusing to understand.
Most countries require citizens to file tax returns once a year. In the United States, forms must be completed by April 15 for financial data for the January before December. In Australia, the tax year runs from July 1 to June 30, and taxes must be filed by October 31 to avoid financial penalties.
Tax returns can be filed individually or on behalf of a family, called a joint tax return. Married couples can choose to file alone or together depending on what best suits their income. Children under the age of 18, or sometimes those in college, may be considered dependents under United States tax law. This means that your income and deductions are included with your parents’ taxes, rather than separately.
The government body in charge of handling taxes is responsible for issuing tax return documents to citizens. These documents include wage statements such as W-2s, issued by employers, and tax forms that calculate amounts owed to the government by combining income and deductions. In the United States, the federal governing body is the Internal Revenue Service, or IRS, although individual states have separate agencies for state taxes. In the UK, a tax return must be filed with Her Majesty’s Revenue and Customs (HMRC).
In the United States, an individual citizen can file a tax return, with the help of a tax accountant or certified public accountant (CPA), or by using specialized computer software. Using an accountant is considered by some to be the best option, as they are very familiar with the system and can help you find deductions you might not have noticed. Tax return software has become very popular in the 21st century as the IRS now allows some taxes to be filed online. The software can also limit math errors and explain complicated processes.
Tax season is a source of fear for many citizens, even though it is often the busiest time of the year for accountants. While some people may be lucky enough to have been overcharged by the government and can look forward to a check in the mail, many are subject to lesser taxes through complicated laws and must pay their government for mistakes. Despite the considerable foreboding associated with filing a tax return, keep in mind that taxes are what keep water at the taps and roads under repair. As Oliver Wendell Holmes said, “Taxes are the price we pay for civilized society.”
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