ITR Filing | Meaning and Definition

What is ITR filing?

It is the process of submitting your income tax return to the government. This is usually done annually, though you may need to file more frequently if your circumstances change. Filing an ITR is to let the government know how much money you have earned in a year and what taxes you owe.

Importance of ITR Filing

For those unfamiliar with the term, ITR stands for individual tax returns. Filing an ITR is important because it is how the government taxes individuals. Without an ITR, individuals would not be able to pay taxes. The purpose of taxation is to fund the government to provide services to its citizens. Taxpayers pay for services such as education, healthcare, and infrastructure. By not filing an ITR, individuals are essentially free-riding on the system and not contributing their fair share. In addition, failure to file an ITR can result in penalties and interest charges from the IRS.

Benefits

Doing your taxes is always a pain, but it’s especially painful when self-employed. It’s easy to end up with a headache between keeping track of all your business expenses and making sure you’re paying the right amount of taxes.

Thankfully, there are some ways to make tax time a little easier. One way is to file your taxes electronically. Filing electronically has a lot of benefits, including:

•   Saves time: You can file your return in minutes compared to hours if you file by mail.
•   Less likely to make mistakes: Tax software checks for errors and catches deductions you may have missed.
•   Get your refund faster: The IRS issues most refunds within 21 days of receiving an electronic.