How Does One Qualify to Make a Tax Return?
To help in running a government, taxes are levies imposed on the citizens who have attained a certain age to fund its expenditures. This is a law that everyone should pay their taxes, and failure to do so 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.
If the expenditures happen to be more than the taxes paid then the government in place goes into debt. To pay this taxes, one has to file a tax return. Different taxing authorities in different countries prepare this form which is used in calculating the amount of taxes a person 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. A person who is an adult according to a certain country’s identification and has an income then they are meant to fill a return. If a person is in the private or public sector, or even self-employed doesn’t count. The filing of these reports usually have a deadline and once you delay a penalty is given.
There are different types of tax returns that an individual may fall in. Let us start with the taxes imposed on people with an income, commonly referred to as the income taxes. The profits, which are the taxable income is what usually gets taxed.
We also have the employment taxes which is taxed on the 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). We also have the taxes that an employer pays to cater for employing people from his or her own funds based on the amount of the employees’ wages.
The statutory excise tax is another one, which is an inland tax on the production of goods for sale within a country. This excise taxes are imposed separately from the other duties like the value added tax (vat).
Lastly is the transfer taxes which are refers to the tax paid when an individual passes a transfer of title to property. Areas like the real estates and in shares where the registration of formal agreement has to be done is involved in these.
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.