A tax return is a form filed with reports like income, expenses, and other pertinent tax information. Tax returns allow taxpayers to calculate their tax schedule tax payments, liability or request refunds for the overpayment of taxes. In most countries, tax returns must be filed annually for an individual or business with reportable income.
The income section of the tax return lists all sources of income.
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Deductions decrease tax liability. Tax deductions vary considerably among jurisdictions, but typical examples include contributions to retirement savings plans, interest deductions on some loan, alimony paid etc.
Tax credits are amounts that offset tax liabilities or the taxes owed.
After reporting income, deductions, and credits, the taxpayer ends their tax return. The end of the return identifies the amount the taxpayer owes in taxes or the amount of tax overpayment. Overpaid taxes may be refunded or rolled into the next tax year. Taxpayers may remit payment as a single sum or schedule tax payments on a periodic basis. Similarly, most self-employed individuals may make advance payments every quarter to reduce their tax burden.
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