Wwhen it comes to paying taxesIt is popular belief that it is a complicated matter but many say that it is not that difficult once you break down the different fundamentals and understand the terminology used by the IRS.
For example, tax returns and tax refunds are not the same, although they sound similar, which often causes people to confuse them.
What is a tax refund?
Tax refunds are issued by the US Treasury when a person paid more tax than was necessary, on their state or federal return, such as when an employer withheld more money from an employee’s paycheck than was necessary.
Also those who file estimated taxes each quarter, because they are self-employed, are often the individuals who receive back the taxes paid in excess.
The IRS refunds the overpaid amount in a single payment to the taxpayer.
What is a tax return?
A tax return, on the other hand, is the form an individual submits to the IRS with their adjusted gross income, expenses, and other financial information, with most of the information taken from the W-2 statement, provided to the taxpayer. by your place of work in advance.
Among the information you can find on your tax return is much of the information you need to file your taxes, such as the amount you’ve already paid in tax, your gross income, and more.
A tax return also includes deductions such as charitable contributions, health care coverage, business and home office expenses, contributions to your Roth IRA, and deductions for children.
In other words, to get a tax refund, a person must first file a tax return.