An individual tax return is a form filed with the IRS to report income, deductions, and tax credits, determining how much an individual owes in taxes or if they are due for a refund. An individual reports income from sources like wages, self-employment, interest, and investments. After calculating adjusted gross income (AGI), the taxpayer can either take a standard deduction or itemize deductions like mortgage interest or charitable contributions. The resulting taxable income is used to determine tax liability, and available tax credits reduce the amount owed. The return also reflects whether taxes have already been paid through withholding or estimated payments, resulting in either a refund or an additional tax payment.

Individual and business taxes both involve reporting income and calculating tax liability, but they differ in structure and the forms used. Individuals report income from wages, investments, and other sources on Form 1040, applying deductions and credits to reduce taxable income. Business owners, including those in real estate, may file on Form 1065(for partnerships), Form 1120S (for S-corporations), or Form 1120 (for C-corporations), depending on their business structure. Real estate investors can deduct property-related expenses like depreciation and mortgage interest to reduce their taxable income. Both individuals and businesses must ensure accurate filings and comply with tax laws, making quarterly estimated payments when necessary.