What is the income tax return? Each spring is income tax return time. 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 story begins in January through March of every year when workers receive their wage and tax withholding statement from their employers. Those in school will receive statements of tuition, scholarship, and aid information covering the previous calendar year. An income tax return form is then used to take the income data and determine the correct dollar amount of taxes for which the individual is liable.
Although a person filing the papers detailing income, 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 is three parted. 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. And then, your tax return states how much you pay in tax to the federal and state governments.
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 you owe the government the difference.
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.