Any country, in order to exist, has to levy taxes on its citizenry. The reason for this is that each government needs to have money for its expenditures without which the government cannot perform its duties and functions. Now that the tax season is coming, we are once again reminded of the need to lodge our income tax returns. For some people, who are first-timers in the process of lodging income tax returns, they may be quite confused as to the difference between “income tax” and “income tax returns.” If you search the internet, for example, for ideas as to what may be the difference between these two words, you will definitely be surprised as to how many people are confused about this subject matter. You will certainly find some blogs which posit the question about the difference between these two concepts. Yet, the difference is quite simple. The income tax is the tax that is levied by the government on entities or individuals. This type of tax depends on the profits and income gained by the individual during the fiscal year. Likewise, this tax is usually computed by multiplying the taxable income and the tax rate. The thing about the tax rate is that it increases as the income—that is taxable—increases. On the other hand, the income tax return is the tax form that is usually utilized to file an income tax with the ATO. This form is the documentation of the income tax which you lodge every tax season. This tax return is filed annually by every business or individual that receives income every year. The income may refer to either a regular income, as in the case of wages, or it may also refer to dividends, interests, profits, and capital gains.
Taxation in Australia
Taxations around the world vary from state to state and from country to country. However, an example of a good taxation system is that of Australia. The tax season in Australia usually starts in the 1st of July and is due by the end of October. Hence, people have ample time to lodge their income tax returns on time. Likewise, with the development of the World Wide Web, the taxation process in Australia has become easy and convenient. The filing of income tax returns can be readily done online, including the submission of various documents to bolster and prop up the income tax computation that you have on your income tax return. Australian Tax Organization or ATO has provided tax payers with exhaustive guidelines on how to conveniently lodge tax returns online. Just like in other highly advanced countries, the process of lodging income tax returns in Australia becomes simple and easy even for the first-time lodgers of income tax. Moreover, anyone who wants to lodge their income tax in Australia is provided with two lodging options: one can either use “my Tax” or “e-tax.” Using the data from previous tax returns, a person can have a prefilled tax form that can greatly facilitate the process of lodging. Additionally, the tax returns that are lodged using the web are immediately acknowledged within a short period of 12 business days.