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

By the way – it’s not a given that you will always get a refund: in certain circumstances you may end up owing money when you file your taxes. I know a lot of people feel that the refund is “the government giving you money”, but actually it’s you getting reimbursed for overpaying taxes through the year, at 0% interest. (I.e. if you get say $5K refund, then that’s like giving the government an interest free loan of $5k for 6 months).

Also – you do not need to go to a tax adviser to do your taxes. If you are in a job, and you maybe have a mortgage and do a few share trades then there’s lots of tax software products that can electronically file your taxes – e.g. TaxAct, TurboTax, etc. Not recommending or cautioning against any of them, but just pointing them out for your consideration.

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