What is a tax return?

A tax return is a formal document submitted to the government that reports an individual's income, expenses, and other relevant tax-related information for a specific period, usually annually. This document is essential for calculating an individual's tax liability, determining eligibility for deductions and credits, and ultimately ensuring compliance with tax laws. It typically includes details such as wages, dividends, and capital gains, as well as allowable deductions, which collectively help determine how much tax is owed or if a refund is due. Filing a tax return is a crucial part of the tax process, as it allows individuals to report their financial situation to the Internal Revenue Service (IRS) or equivalent tax authority.

In contrast, other choices describe different financial documents or processes. A summary of personal assets and liabilities provides an overview of an individual’s financial position but does not serve the function of reporting taxes. An application for a loan from financial institutions is a request for credit that does not relate to tax obligations or income reporting. An itemized list of personal expenditures tracks expenses but does not fulfill the requirements of reporting earnings, taxes owed, or payments made to the government. Thus, the correct understanding of a tax return encompasses its role as a mandatory report of financial information for tax purposes.