What is a Tax Return or Tax Filing? Why Do I Need to File?

Any of your earnings in the United States are subject to applicable federal, state, and local taxes. Filing tax paperwork, such as a tax return, is a reconciliation that compares what you actually paid in taxes throughout the year to what you should have paid in taxes.

Employers and schools are required by law to withhold taxes from your paychecks or taxable stipend payments. If the taxes that were withheld from your payment are higher than what you should have paid, you will get a refund after filing your tax return ("tax refund"). If taxes were not withheld, or insufficient tax was withheld, then you will owe money at the time of filing your taxes. You declare your income and account for the taxes owed on a form or set of forms called a “tax return.”