Employment Income Tax Return - What You Must File In Order To Pay Capital Gains Tax

Employment income tax return is required by every person who gets self-employment, regardless of their personal earnings. The only exception to this general rule is if the individual is a dependent of another person and does not earn enough income to be considered as self-employed. In such a case, the dependent is treated as an employee for the purposes of filing the income tax return. However, there are certain exceptions to this general rule and one of them is the self-employed professionals like consultants, architects, and doctors.

There are many different types of employment income tax return forms. One type is the annual income tax return form. This is the most basic form and it asks for basic information about the personal earnings of the taxpayers. Apart from this, there are two other types of annual income tax return forms, the semi-annual tax return form and the annual renewable status tax return form. The former form is valid on only one year and hence has to be filed within theoso the year of its filing while the latter has three years of filing after which it becomes valid.

Other kinds include the foreign sales corporation income tax return forms that have to be filed by individuals who receive commissions as a member of a foreign sales corporation. Another form that you have to file yearly is the foreign property return which has to be filed by individuals who buy or sell foreign property and pay capital gains and income taxes on them. The annual return also includes an installment agreement for the mutual repayment of tax amounts by the individuals on an installment basis, either monthly or annually. An EICAR tax return includes information on the refund and the investment made on behalf of a business.

There is also a self-employed individual health tax return form that has to be filed by the self-employed individuals for the purpose of calculating the medical expenses and other income earned by them for the previous year. It is important for the individual to take care that they fill in the right boxes and also submit the right documents along with the application form. The self-employed health insurance tax return forms also have a separate section where different tax credits are calculated for each individual insurance plan. The tax credits may depend on whether the individual takes up a policy that covers him/her and another that does not, whether he/she takes up a plan that offers reimbursement through coinsurance and whether he/she takes up a health savings account or an HSA.

Other important deductions to be declared include business expenses and travel expenses. Business expenses are those expenses incurred in carrying out the trade and include expenses like rent, utilities, advertising expenses and miscellaneous expenses like meals, holiday expenses, etc. The tax return form for self-employment income also includes a section that says how much tax was paid in respect of business expenses.

Travel expenses include airfare, hotel expenses, and car expenses, if one is traveling away from home. Similarly, miscellaneous expenses incurred during a year include educational expenses, medical expenses and even expenses that are incurred for learning and leisure activities. All these expenses can be deducted. However, one must remember that tax deductibles cannot exceed the deductible amount. There are some limits too on the amount of deductions that one can make for business expenses and travel expenses.

Another important document to be included in the return is the annual income statement. This statement gives an accurate depiction of the individual's yearly income and therefore is very important. This statement is to include the gross income, deduction from employee wages or benefits and also profit. It is required to be submitted along with the tax return. If the annual income statement for a single year is submitted then it is mandatory for the employer to provide an income statement to the employee within a period of 12 months after the end of the year.

There are other documents as well, which are to be submitted along with the tax return such as the financial statement, business records, information return, social security form, certificates of deposits, banking records, CDs, and so on. However, the information return itself is the most important of all the documents. It is mandatory to furnish this information within a stipulated period of time. However, many small businesses fail to understand the importance of the information return and thus do not bother filing their returns. Hence, it is important for every small enterprise to seek help from professionals to ensure that they file their returns on time.

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