Attorney at Law

Tax Refund

Lia Kopin-Green
April 23, 2023

What is a Tax Refund?

A tax refund in United States tax law refers to the reimbursement of excess income tax paid by a taxpayer during a given tax year. Tax refunds often occur as a result of employer’s withholding too much in taxes in an employee’s paycheck. This can also happen due to changes in income, deductions, tax credits or filing status. According to the U.S. Treasury, nearly three-fourths of taxpayers are over-withheld, which results in millions of tax refunds each year.

Key Takeaways

  • In United States tax law, a tax refund is the reimbursement of excess income tax paid by a taxpayer during a given tax year.
  • Tax refunds typically represent an interest-free loan that the taxpayer has made to the government.
  • Taxpayers can avoid overpaying their income taxes by accurately filling out tax documentation and working with a qualified tax lawyer.

How Tax Refunds Work

Throughout the year, most taxpayers will have their taxes automatically withheld from their paychecks by their employers. The exact amount that is withheld depends on a variety of important factors, such as income and allowances claimed on the W-4 form. 

At the end of each tax year, U.S. taxpayers are required to file income tax returns that detail their income, deductions and credits. The Internal Revenue Service (IRS) uses this document to determine the taxpayer’s actual tax liability. If the taxes paid throughout the year were more than the calculated tax liability, the IRS will issue a refund for the difference. Simply put, tax refunds are given back to a taxpayer when they have paid more in income taxes than they actually owe. 

The amount of taxes that can be refunded varies from year to year, depending on the individual taxpayer’s financial situation. The amount of income earned, deductions claimed and credit can all affect the amount of refund received. For instance, if a taxpayer’s income increases, they may end up owing more in taxes than they did the previous year. This may result in a smaller tax refund. Alternatively, if a taxpayer’s income decreases, they may owe less in taxes, ultimately leading to a larger tax refund. Changes in federal or state tax laws and regulations, such as the adjustment of tax rates, can also impact the amount of a tax refund. 

If the government finds a taxpayer eligible for a refund, it will be issued in one of two ways: by mailing a physical check or by depositing the funds directly into the taxpayer’s bank account. Direct bank account deposits are generally the favored choice, as they offer the advantage of making the funds available within just a few days after the refund is processed. You can opt for this method by supplying your bank account details on your tax return. If you fail to provide your bank information on your tax return, or there are any issues with the direct deposit, the government will mail a physical check to the address listed on the tax return documents.

Bottom Line

Tax refunds are a beneficial way for taxpayers to recoup any overpaid taxes from the government. However, ensuring that you pay the correct amount of taxes from the get-go is a smart strategy to prevent the government from owing you a tax refund. Working with an experienced tax lawyer is a great way to make sure you are paying the correct amount of taxes considering your specific circumstances. Get in contact with a tax attorney in your area today with Attorney At Law.

Ask a Lawyer

Ask your own question and get advice from expert attorneys
Ask Question

Featured Tax Law Lawyers

Roman Law Firm

22 years in practice
Bankruptcy, Business Arbitration, Business Dissolution, Business Finance, Business Law
View Profile

Fishman Larsen Callister

34 years in practice
Employment Law, Real Estate Law, Tax Law, Trust & Estate
View Profile

The Derbes Law Firm, LLC

34 years in practice
Bankruptcy, Business Law, Real Estate Law, Tax Law, Trust & Estate
View Profile

RYTELAW-Payman Bafekr, Esq.

1 years in practice
Auto Accidents, Bad Faith Insurance, Bicycle Accidents, Contract Law, Insurance Law
View Profile

Issa Law, LLC

13 years in practice
Auto Accidents, Bicycle Accidents, Criminal Defense, DUI Law, Motorcycle Accidents
View Profile

Law Office of Tal Rubin, PC

22 years in practice
Auto Accidents, Personal Injury
View Profile


Are you looking for an attorney? Do you have questions about a legal case you are facing? Contact us now and we will put you in touch with a lawyer for free.
Attorney At Law is changing how clients connect with lawyers. By providing an innovative platform to lawyers who want to expand their practice’s reach, AAL is bringing law practices into the future.
6142 Innovation Way
Carlsbad, California 92009
Some of the content of this website may be considered attorney advertising under the rules of certain jurisdictions. The information on this website is for general information purposes only. Nothing on this site should be taken as legal advice for any individual case or situation. This information is not intended to create, and receipt or viewing does not constitute an attorney-client relationship.
crossmenuchevron-upchevron-down linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram