A Quick Guide to Tax Returns
To fund its expenditures, the government in place imposes levies on citizens of a certain age in form of taxes. Paying of these taxes is a law and failure to pay them at the right time is a punishable act. The taxation goes into funding activities that are involved in the running of a government in all the sectors.
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. A person is able to download the forms or even get them from the taxing authorities offices.
In making a tax return, the government is able to know about the individuals’ total income and the accrued wealth and debts. After one has been issued a national identification and can be referred to as an adult with an income then one has to file a return. The kind of occupation one has does not matter, be it in private, public or even self-employed. A penalty is given if one delay in making the returns before the deadline.
An individual may fall into the different kinds of returns that we have. Let us start with the taxes imposed on people with an income, commonly referred to as the income taxes. This is mostly done on the profits which is the taxable income.
The employment taxes happens to individuals on a payroll. By getting a certain percentage of the salaries, this is usually done by both the employers and the employees. Categorized into two, these payroll taxes have deductions that employees get from the salaries which is known as the pay as you earn (PAYE). Secondly, there is the taxes paid by the employer based on the employees’ wages which an employer pays from his or her own funds that caters for the having employing someone.
Within a certain country, there is also the statutory excise tax which is an inland tax on goods produced and sold in it. The excise taxes are different from the others like the value added taxes and are imposed separately.
Lastly is the transfer taxes which are refers to the tax paid when an individual passes a transfer of title to property. This involves areas like the real estates and in shares where registrations of formal agreements have to be done and also a stamp duty.
It is important to make the returns on time to avoid the charges done on defaulters and late payments once you know the kind that you are supposed to make.
Source: Tax Return