A Quick Guide to Tax Returns
To help in running a government, taxes are levies imposed on the citizens who have attained a certain age to fund its expenditures. Paying of these taxes is a law and failure to pay them at the right time is a punishable act. Government activities which involves infrastructure, public and the military works and all the government activities are funded by these taxes that people pay.
The expenditures should be able to be at par with the taxes otherwise a government goes into debt. To pay this taxes, one has to file a tax return. This is a form prepared by different taxing authorities in different countries to aid in calculating the amount of tax one is meant to pay. These forms are mostly found in the different offices, and also some can be downloaded from the internet.
In making a tax return, the government is able to know about the individuals’ total income and the accrued wealth and debts. People with a national identification and can be referred to as an adult in a certain country, with an income, are meant to fill their returns. If a person is in the private or public sector, or even self-employed doesn’t count. A penalty is given if one delay in making the returns before the deadline.
There are different types of tax returns that an individual may fall in. First, we have the income the taxes, which are meant to be imposed on people with the income they get. This is mostly done on the profits which is the taxable income.
To the individuals on a payroll, we have the employment taxes. This involves the employers and the employees and is usually done by getting a certain percentage of the salaries paid. These payroll taxes are usually categorized into two, one is the deductions that employees get from their salaries, which are commonly known as the pay as you earn (PAYE). To cater for having employed someone; an employer also pays a certain amount of the tax depending on the employee’s wages.
We also have the statutory excise tax which is an inland tax on the production of goods for sale within a certain country. The excise duties are an addition to the other taxes like the value-added taxes.
When a title is transferred to a property, then a tax known as the transfer taxes is paid. Involved in this is the areas like the real estates and in shares where registrations of formal agreements have to be done and probably involves a stamp duty.
To avoid the extra charges the defaulters pay, once you know the kind of return you are meant to make, it is important to do it on time before the deadline.
Source: Tax Return