At a very high level, Tor relays encrypted TCP traffic through atleast three intermediatories (relays). It is most effective for anonymity if used along with their Firefox based browser distribution. They do not recommend using Tor as a tunnel/proxy.
afaik this is because of leakage problems - which can happen silently (eg tor connection goes down, suddenly all your traffic goes through clearnet)
using whonix (https://www.whonix.org/) mitigates this problem
whonix in qubes is also an option https://www.whonix.org/wiki/Qubes