Income Tax Return Clarification
What are income tax returns? Each spring is income tax return time. We all know about 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 employees receive their wage and tax withholding form from their employers. Students will receive statements of tuition, scholarship, and aid information covering the previous year. An income tax return form is then used to take the income data and calculate the correct dollar amount of taxes for which the individual is liable.
Although a person filing the papers detailing earnings, deductible expenses, 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 has three parts. 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, up till the end of the year. Finally your report details on how much income tax is your responsibility.
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 were not enough and now there is a payment due.
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.
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