by 
The Curious Bag
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Different forms of income are taxed at different rates. An income tax return is the form used by the Internal Revenue Service to determine the amount of tax a taxpayer or corporation is responsible for paying.
Types
America employs a pay-as-you-go tax system whereby tax payments (federal tax withholding or estimated tax payments) are made throughout the year.
Features
An income tax return consists of five major sections: exemptions, credits, income, adjusted gross income and payments.
Considerations
The amount of tax you are responsible for paying, otherwise known as your tax liability, is determined by your income and filing status. Use the tax tables found in the instruction booklet of your tax return to determine your tax rate. Use the tax rate amount to determine the dollar amount that you owe in tax.
Significance
On an income tax return, the credits and payments are used to offset your overall tax liability. The more credits and payments you have, the less tax you owe.
Warning
Failure to file an income tax return can result in the assessment of penalties for failure to file.
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