BREAKING DOWN Tax Refund

Tax refunds are a return of excess amounts of income tax that a taxpayer has paid to the state or federal government within the past year. In the United States, most people receive income tax refunds during the year. These refunds can be issued in the form of personal checks, U.S. savings bonds, or direct deposits to the taxpayer’s bank account. Most refunds are issued within a few weeks of the date the taxpayer initially filed their annual income tax. 

For immediate questions about an individual income tax refund, visit the IRS website.

Taxpayers tend to look on tax refunds as a «bonus» or a stroke of luck at tax time. Alternatively, some embrace the idea of a temporary, interest-free loan to the federal government as a means to be forced to save some money. Many people in the United States receive tax refunds even if they haven’t paid federal income tax. 

The specific measures of the EITC have fluctuated over the years. In the aftermath of the 2007-2008 Great Recession, the EITC was temporarily extended under the Obama Administration to married couples and families with three or more children.Some tax refunds occur as a result of refundable tax credits, which results in a refund check if the tax credit applied is higher than the individual’s tax bill. In the United States, tax refunds are calculated on an annual basis. 

This can be a disadvantage to taxpayers just entering the workplace or individuals who are unemployed for extended periods of time. Until the annual tax refunds are filed, the government will withhold much more income than that for which these people will actually be liable. 

You can log in and check the status right on the IRS website here