Income Tax Return Clarification
What is this that’s called the income tax return? Each spring we file federal and state income tax returns. We are all familiar with filing our taxes, paying them, and getting our tax refund, but somehow the term “tax return” is not always clearly understood.
The situation begins in January through March of every year when wage earners receive their wage and tax withholding print out from their employers. Those in school will receive statements of tuition, scholarship, and aid information covering the previous year. An income tax return form is then used to take the amount of earnings and figure out the correct dollar amount of taxes for which the individual is liable.
Although a person filing the papers detailing earnings, deductions, and taxes may have some or all of their withheld taxes returned to them, that is not what is meant by the term “income tax return”. Actually, what “tax return” refers to is threefold. First, you are letting the government know, or are returning a report on, how much you made in the previous year. Next you are stating how much you have paid in taxes, so far. Finally, what amount of tax on your income needs to be paid is calculated and specified.
So in going through this tax return process many people show that they have overpaid their income tax and therefore have a refund coming. The alternative is of course, that there was not enough money withheld, or that the quarterly payments did not fully cover and now a payment is owed.
To summarize, the phrase “income tax return” is referring to the document that you fill out and send to the IRS and to your state tax department.
This entry was posted on Sunday, January 31st, 2010 at 4:43 am and is filed under General. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.