Refund

DEFINITION of 'Refund'

A payment from the government for an individual's overpaid taxes. An individual in this situation is said to be "over-withholding." Federal income tax refunds are not taxable.

BREAKING DOWN 'Refund'

A refund occurs when the government owes some of the taxes you paid throughout the year.

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RELATED FAQS
  1. Can the IRS withhold your tax refund?

    Learn about the instances in which the IRS can levy your federal and state income tax refunds, and find out how the levy ... Read Answer >>
  2. What are the benefits of splitting my tax refund?

    If you receive a refund when you file your tax return, there are some convenient options you can take advantage of. Read Answer >>
  3. Can the IRS garnish your tax refund?

    Understand whether the IRS can legally garnish a person's tax returns. Learn the priority for garnishing wages for state ... Read Answer >>
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    Read about the effective tax rate for individuals when compared with the effective tax rate for corporations, including how ... Read Answer >>
  5. What is the difference between federal and state withholding tax?

    Discover whether you can file your taxes by yourself. The three main options for tax preparation are a tax professional, ... Read Answer >>
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