eli5: can someone explain tax returns?

Question

i always see so many people talk about tax returns or tax season around this time and its so confusing. to me it seems like free money

In: 9

Answer 1

Once a year every citizen and the government does a reconciliation to ensure the correct amount of taxes are paid.

Sometimes you have already paid more than what you owe. In this case, you get a refund.

Sometimes, you have not paid all of the taxes you owe. In this case you have to make a payment to cover that amount.

Typically speaking, people on the lower end of the income spectrum receive refunds far more often than not since taxes are collected from each paycheck throughout the year.