Tax is one the most important expenditures of the year, and for some, it is the most expensive one as well. Although the process of all the calculations and filling the forms may be difficult at first, one has to look at the bigger picture and see why they’re doing it in the first place. It’s so you can live a comfortable life and contribute to the economy. If you think about it that way, you can see just how important taxes really are, and that is also a major reason as to why you should be extra careful and diligent when filling up your tax return.
Tax returns: What are they?
Although the laws vary from country to country, in the USA, if you earn more than a certain amount, then you are expected to file a tax return. However, not everyone who earns that certain amount of income is expected to file a tax return. Those who have their pensions and salaries taxed under PAYE (Pays As You Earn), then filing a tax return is not necessary because they already deduct the correct amount.
Tax returns are issued by the IRS (Internal Revenue Service), where you have to fill in all the details about your income, and you could either do the calculations for your taxes yourself or you could just let the IRS do it for you. Since the process can get quite complicated, the form comes with a booklet to guide those that might require assistance. It is mainly 1 page long, but it also has 9 extra pages along with, which is something that people with only a specific amount of income have to complete.
Important details about tax returns
Even if you are registered under PAYE, you are still expected to fill a tax return form sometimes. That usually happens when you move jobs, and you have to fill the form just so that they can check whether or not you’re still paying your taxes properly.
If you think that you’re not being taxed correctly, i.e. the percentage is too high or too low, fix it yourself instead of waiting for the IRS to notify you, as you might be fined otherwise. It is crucial to file your taxes properly, as failing to do so could lead you to do time in prison. And to avoid penalties, send in your tax returns as soon as the tax year ends, which is 31st January in America.
Tax returns can be scary, especially if you have been undercharged and have to pay more in order to fix the mistake. That said, taxes are still important, even if you have been undertaxed and owe the government a larger sum of money than you initially did.
Taxes are important and must be paid to the government in time for it to function smoothly. Although it is unfortunate for those who were undertaxed, taxes are still very important, and one should never lose sight of the bigger picture, which is the betterment of the economy.