What is a Tax Return? How is it done? Who Should Do It?
Tax return means "tax return" or "tax declaration" in Turkish. In the United States, a tax return is the process of submitting income, expenses and similar related tax declarations to the tax office through a form. Tax liabilities or overpayments of tax are calculated based on the form submitted by taxpayers. This system, which is calculated annually in most countries, is determined by the IRS (Internal Revenue Service) in the USA.
The American tax system may seem a bit complicated to those who encounter it for the first time or who are just starting out. Knowing the details of this system, which is completely unique, will prevent any negativity that may occur. Everyone who lives, works and invests in the US is obliged to pay taxes. In order not to face any sanctions, taxpayers should prepare the tax file and submit the declaration in accordance with the legislation.
In order to file a tax return in the US, forms prepared by the IRS or other competent authorities are used. Through the tax return, tax authorities report taxpayers' debts and payments. A calculation of how much tax is due is made on the tax return forms, which include details of income and various costs. As a result of the calculation, taxpayers can either get back overpayments or owe money.
When is the tax return due?
In the United States, as of 2022, the tax return or tax return is due between January 1 and April 15. Since 1955, if April 15 falls on a weekend or other holiday, it is moved to the first business day after. The deadline can be extended in states affected by strong natural disasters such as storms, floods and earthquakes. In 2020, due to the coronavirus pandemic, the tax return deadline was postponed until May 17, 2021.
Who Should File a Tax Return?
The main taxpayers required to file a tax return in the US are;
- Every US citizen, no matter where they live
- Foreign nationals living in the US and earning income there
- Persons who do not live in the US but earn income there
- Beneficiaries of support programs in the US
- US beneficiaries of health benefits
- Investors or purchasers of property in the US
- Students and business travelers visiting the United States on a J1 visa
For all other tax return filers, there is a helpful application on the official website of the IRS. You can find detailed information about your personal situation by answering the questions in the "Interactive Tax Assistant (ITA)" application on the "Do I need to file a tax return" page.
What happens if a tax return is not filed?
In the United States, taxpayers must file their returns with the federal or state tax authorities within the specified time period. If not, they will have to pay penalties or extra interest. Moreover, this may cause various problems in entering and exiting the US in the future.
In addition, people who do not complete and submit their tax return forms to the IRS will not be able to receive their tax refund, if any. After filing a tax return, the relevant documents must be kept for three years. In some cases, tax returns may be required to be kept indefinitely.
How to file a tax return?
In order to file a tax return in the US, the relevant form must be completed and submitted to the IRS. A number of items must be completed on these forms, such as wages received, self-employment income, royalties, capital gains, deductions, alimony, retirement savings plans and loans.
Tax return forms vary depending on the status of the person filing. U.S. citizens and resident aliens must use the IRS prescribed Form 1040. Nonresident aliens must report income on Form 1040NR, corporations on Form 1120, partnerships on Form 1065, and income from sources unrelated to employment on Form 1099. The most commonly used reporting method for the income section of the tax return is the W-2 form.
It is possible to access the forms required for income declaration from the official website of the IRS in pdf format. After the printed forms are filled in, they must be submitted to the IRS. Another option is to use web-based software that publishes on income declaration. If the necessary instructions are followed, the forms can be filled in accordance with the legislation.
All tax return forms contain many items. However, extra documents may be needed to support the items marked on the form. One of the fastest solutions for tax returns is to get support from a tax expert. Experts working in the field of tax and accounting services work to complete this entire process quickly and healthily. The consultancy service you will receive will ensure that you make an accurate declaration and will also make it easier for you to understand the taxation policies in the USA.
