What is an Individual Tax Return?

An individual tax return is a legal document that is submitted to the tax collecting agencies of state or federal governments; in the United States, the Internal Revenue Service, or IRS, is the federal agency to which tax returns are submitted. This individual tax return form determines the tax liability of the individual or couple who is submitting the form. Tax liability is based on income level and marital status, as well as a number of potential other factors such as deductions that are included on the tax return.

There are three different versions of the 1040 form that are used to file an individual tax return: the 1040EZ, the 1040A, and the basic 1040 itself. The 1040EZ is the simplest, and usually can only be used by single people with very simple tax returns. The 1040A is slightly more complex, but is the most common, while the formal 1040 is the longest tax form, used by people with a number of deductions, business expenses, or more complicated financial situations. Keep in mind that an "individual tax return" simply means that it is not a corporate or business tax return; it does not always mean that just one person is filing it, as two married people may jointly file an individual return as well.

A person may complete an individual tax return independently, or may receive help through the use of tax software or a tax accountant. The point of the return is simply to declare the amount of income that one received throughout the year, as well as the amount of tax that one has already paid. By completing the formulas on the form, one can then determine if one overpaid in tax throughout the year, and is entitled to a tax refund from the government, or if one underpaid and owes the government money. People who withhold their own taxes should keep in mind that quarterly estimated tax payments to the IRS are required, and if these are not made in the correct amount and on time, there will be a heavy tax penalty assessed.

Tax returns also include information about things such as deductions, business expenses, or dependents, just to name a few. Each of these items can affect one's taxable income for the year, and therefore the amount of taxes that are owed. It is important to always fill out an individual tax return carefully and correctly, because incorrect information submitted to the federal government can lead to significant legal penalties.