Kate is filling out her income tax return. Her tax for last...

Kate is filling out her income tax return. Her tax for last year is $\$ 973$ . Her employer withheld $\$ 712$ in federal taxes.
a. Does Kate get a refund or does she owe the government money?
b. What is the difference between Kate's tax and the amount with-held by her employer?

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Key Concepts

Refund and Balance Due

This concept relates to the comparison between an individual’s tax liability and the tax payments already made through withholding. If withholding exceeds the tax liability, a refund is issued; if it is less, the taxpayer owes the difference.

Tax Withholding

Tax withholding is the amount of money that employers deduct from employees' paychecks to prepay their anticipated tax liability. This mechanism ensures that taxes are paid gradually throughout the year.

Income Tax Return

An income tax return is a document that individuals submit annually to report their income and calculate their tax liability based on applicable tax laws. It serves as a reconciliation of taxes owed versus taxes pre-paid during the year.

Tax Liability

Tax liability is the total amount of tax that an individual is obligated to pay for a given tax year. It is determined by applying the relevant tax rates to taxable income and taking any deductions or credits into account.

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