What is a Tax Return?
A tax return is a document filed with state or federal authorities that declares a taxpayers liability for being taxed, based on their yearly income. Three outcomes are possible from filing a tax return: either the taxpayer has either 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 refund them, whereas if they have been charged too little, they must pay the difference.
Tax documents are often extremely complicated forms that frustrate many people. Aside from the rather basic principle of totaling up your yearly income and determining if you have been taxed the right percentage, they also include additions or subtractions for certain actions. In the United States, for instance, families may be able to take deductions for dependent children or for funding college educations. Self-employed workers may also be able to deduct work related expenses, such as part of their rent or gas mileage. Deductions can help increase your government return or reduce your payment, but they can be very confusing to understand.
Most countries require citizens to file tax returns once per year. In the United States, forms must be completed by April 15th for financial data of the previous January through December. In Australia, the fiscal year runs from 1 July through 30 June, and taxes must be filed by 31 October to avoid financial penalties.
Tax returns may be filed individually or on behalf of a family, called a joint tax return. Married couples may choose to file alone or together depending on what best suits their incomes. Children under 18 years of age, or sometimes those in college, may be considered dependents under United States tax law. This means that their income and deductions are included with their parents’ taxes, rather than separately.
The government body in charge of handling taxes is responsible for issuing tax return documents for citizens. These documents include wage statements such as the W-2, which is issued by employers, and tax forms that calculate amounts owed to the government by combining income and deductions. In American, the federal governing body is the Internal Revenue Service or IRS, although individual states have separate bodies for state taxes. In the United Kingdom, a tax return should be filed with Her Majesty’s Revenue and Customs (HMRC.)
In the United States a tax return can be done by the individual citizen, with the help of a tax accountant or certified public accountant (CPA,) or using specialized computer software. Using an accountant is considered by some to be the best choice, as they are very familiar with the system and may be able to help find deductions you would 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 mathematical errors and explain complicated processes.
Tax season is a source of dread to many citizens, although it is often the busiest time of year for accountants. While some people may be lucky enough to have been over-charged by the government and can expect a check in the mail, many are subject to under-taxation through complicated laws, and must pay their government for mistakes. Despite the considerable bad feeling associated with filing a tax return, bear in mind that taxes are what keep water in the faucets and roads in repair. As Oliver Wendell Holmes said, “taxes are the price we pay for civilized society.”
What are the causes of low tax revenue in Uganda?
Suntan12 - I heard about that and I cannot believe they can get away with taxing so much.
I hate tax time but I always enjoy getting my refund from my federal tax return.
I feel like I have extra spending money although most financial advisors say that you should adjust your withholdings so that you do not receive a refund because they are essentially holding your money for free and you could be earning interest somewhere else.
Comfyshoes - I agree with you. Each year that I file my federal tax return I always wonder what governmental black hole will my money be going to.
I really like the idea of a flat tax based on consumption and not income. This way even tourists would be paying our taxes and more Americans would not have to file a 1040 tax return and we could get rid of the Internal Revenue Service for good.
Even if the taxes were based on income we should all pay the same percentage. It is not fair that 50% of Americans pay no federal income taxes while the top ten percent of wage earners pay 96% of the federal income taxes.
Look at Illinois who recently raised its state income tax to 68% which is no wonder why people are leaving the state in droves.
Eventually people get sick of the high taxes and will go somewhere else where they can keep more of their income.
While I agree that a certain amount of taxes are necessary in society, I do feel that the most of the money that taxpayers payout to the federal government is misspent.
Many states are looking for a bail out from our tax money because they mismanaged their own states. Look at California who was running deficits of several billion dollars a year because they did not want to cut spending and reduce some of their entitlement programs.
There are also countless other waste of our tax money that goes to fund ridiculous research studies for example.
The states don’t do all that much better either. For example, Wisconsin spends about $12,000 a year on each student and only 33% of eight grade students can read at a proficient level. In Washington D.C. only 13% of the 8th graders can read at a proficient level.
While I do agree that tax payer money is necessary for some programs obviously this money is not well spent because for that amount of money the children could have gone to a private school and gotten a decent education.
The amount of government waste is really endless and I think we would all benefit from lower taxes and a less powerful central government so that we could put our hard earned money to better use.
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