What is the key purpose of filing a tax return?

The key purpose of filing a tax return is to detail income, deductions, and taxes owed. This process allows taxpayers to provide the government with a comprehensive overview of their financial activities during the tax year, including all sources of income earned and any allowable deductions that may reduce their taxable income. By doing so, individuals can calculate their total tax liability or determine if they have overpaid and are eligible for a refund.

Filing a tax return serves not only the function of reporting financial information but also establishes a record of compliance with tax laws. This is essential for individuals to fulfill their legal obligations while also enabling tax authorities to verify reported information and ensure fairness in the taxing system.