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
Tax returns are the forms you have to file annually, where you document your income from jobs, investments, and deductions, credits, etc. to determine what you owe.
Since people have money withheld from each paycheck and remitted to the government, they may have overpaid throughout the year. if that is the case, then they get a TAX REFUND. This is not “free money”, but a surplus of tax payments you made over the past year.
Say you owe $5200 in taxes, but $125 was withheld from each weekly paycheck for income taxes. Since you paid $6500 but only owe $5200, you would get a refund of $1300.
Latest Answers