Importance of Filing Tax Returns
Property, estate, consumption, and income taxes are the four main types of taxes. Property taxes are assessed annually and a portion of the value of the property is given to the government. With income tax, a certain amount is deducted from your salary; you should note that the poor are not expected to pay this type of tax. The government can also get revenue by selling some of the goods and property grabbed from an estate. The government can get revenue from the taxes paid when goods are imported into the country or when products and services are purchased. There will be a need for extensive recording and auditing in order to get consumption taxes. The government can use taxes as a strategy to ensure that citizens reduce the consumption of certain products. The government can minimize the use of alcohol, tobacco, or services like prostitution by levying a tax, sin tax, on the citizens. Generally, their consumption is not fit for human health.
The government uses the tax paid to pay for the services that it offers to the community. Every community should have clerks, administrators, firefighters, and maintenance workers to ensure that there is a smooth running in the community. You should note that these people should be paid. If you realize that the taxes affect the poor people more than they do to the rich; we can say that they are regressive. Tax is progressive if it affects the rich people more than it does to the poor ones.
It can be difficult to get a vehicle loan especially if you do not file your tax returns. It is important to note that most banks ask for the copy of the tax returns. Moreover, the copy can be of help especially if your loan application is rejected. Besides, you will be in a position to get the loan you want if you have a copy of the tax returns. Claiming a refund requires you to show a copy of the tax returns.
Filing your tax returns can help you during visa processing. Traveling overseas requires you to furnish the tax receipt for the last few years before the visa interview. You will note that some embassies need tax receipts for the last three years, while others require the most recent certificates. It will show that you have some money. Therefore, the main aim of taxes is to help collect government revenue in order for it to provide good services to the citizens.