Most national governments assess an income tax that claims a portion of the earnings of individual workers. Sometimes, employers are required by law to withhold a portion of workers’ income for tax purposes, but this does not usually eliminate the worker’s obligation to file an individual income tax return. Income tax returns identify how much money was owed, and how much has already been paid. If too much or too little has gone to the government, that discrepancy is usually revealed by filing a tax return.

Income tax returns are usually a bit different for individuals than they are for corporations. Any company that has made a profit over the course of the year must typically pay an income tax on those earnings. The rate of tax for corporations is where things get harder to calculate. Corporate tax rates vary by type of corporation; industry; number of employees; capital losses, gains, and expenditures; and a whole host of other deductions and considerations. While most individual income taxes are a based on fixed percentage that can be adjusted with deductions, corporate taxes typically involve a lot of calculations and adjustments on the front end.

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