exactly how do tax refunds work?

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I’ve only recently joined the working force, and I am still not sure of this entire concept.

I know I am supposed to go to an accountant and show him a slip from my job for the returns, and also slips from my stocks that show all the net changes.

What I don’t understand is \*why\* I receive a certain amount after doing all of that.

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27 Answers

Anonymous 0 Comments

Every year, you have a variety of options on how to file your taxes. You can file with the standard deduction one year, and then you can file an itemized set of deductions the next year. That is your right.

If you get married one year, and have a baby, that’s a major change in your deductions.

If your baby died and then you divorce, the next year you will file single with no dependents.

If you choose to take money out of your retirement account on the last week of December, that will be counted as income that is taxable (unless its a Roth account).

If you buy a house, that’s a BIG deduction, and will definitely affect your taxes.

The government has had trouble with some people not paying-in enough taxes, and at the end of the year they have to pay more money after they calculate what their tax is for the year. They want to avoid that, so things are set up so that you typically pay-in more than you will “probably ” owe.

Even so, you still have many choices about your tax filing, and neither you or the government know how much you have to pay them, or how much they have to pay you until you make those decisions and then officially file the tax return.

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