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what is a tax return and why do we get it?
Posted by admin on Nov 27th, 2009
Elle asked:
I received a letter from my bank saying that i have an important tax return document inside. What is a tax return thing and does it mean that i get the amount of money indicated in the letter?
I received a letter from my bank saying that i have an important tax return document inside. What is a tax return thing and does it mean that i get the amount of money indicated in the letter?
A tax return means that you’re not generating enough money to qualify to be an eligible person to have to pay for taxes, so you get the money you paid to taxes back at the end of the year = )
The one good thing about makin ga low income, ahahah. =D
A tax return indicates that you probably paid too much in your income tax to the government. that is why the government is giving it back to you.
Usually what your bank sends you is a form showing what interest income you’ve earned on your accounts, since this also has to be reported to the IRS as taxable income. However, it could also be some solicitation mail looking to get you to use their tax service; or a scam mail fraudulently using the name of your bank to try to gain information from you. I would suggest reading the letter to see what it is.
As for the first question, a tax return/refund is the IRS returning the money you overpaid them for your taxes during the year. You are required to pay taxes over the course of the year — employers withhold a certain amount for you, for most jobs, based on the documentation you fill out when you started working for them, or, in other circumstances, you’re required to make quarterly payments toward your tax bill for the year — and if you over pay, then you get a a refund back after you file showing the overage; if you underpay, then you have to send more money to the IRS (and in many cases, pay a penalty for not having prepaid enough).
The document from your bank is probably a 1099-INT. Financial institutions are required to send this document to you (and a copy to the IRS) to show the income that was earned from some type of investment account, typically a savings account.
The amount on the letter needs to be claimed on your Tax Return. A Tax Return is the form 1040 that is required to be filed with the IRS on or before April 15.
There are some minimum amounts of income that must be earned that would require one to file a return. Even if you are under this dollar amount, it is a good idea to file if you receive a W-2 from your employer.
The reason is so that any taxes withheld can be applied appropriately, and you could potentially get a refund of those taxes.
Also, your state may have additional laws related to filing income tax returns.
A tax return is a piece of paper that you file with the government for any year that your income exceeds the filing requriement amount for your filing status. It lists your total income, adjustments to income, deductions, exemptions and is used to calculate your tax liability and figure any refund due to you or additional tax due from you.
What you received from your bank is most likely a Form 1099-INT that shows how much interest they paid you for the year. You must include that on your tax return on the Taxable Interest line.
I find it amazing……the bank pays you interest on your money, and that is TAXABLE. You have to pay taxes on it. Get the tax forms and someone to teach you the basics…..
It simply means that the estimated tax withheld, is more than the actual tax due.