What is the Difference Between Tax Return and Tax Refund?
🆚 Go to Comparative Table 🆚The difference between a tax return and a tax refund lies in their purpose and the information they provide. Here are the main distinctions:
- Tax Return: A tax return is a form filed with the Internal Revenue Service (IRS) that contains your adjusted gross income (AGI), expenses, and other financial information. It is a report of your income and the taxes you have already paid throughout the year, including taxes withheld from your paycheck and estimates paid by self-employed individuals. Tax returns also include deductions and credits, which can lower your tax bill.
- Tax Refund: A tax refund is money sent to you by the IRS after they review and accept your tax return if it shows that you paid more in taxes than you needed to in the previous year. Refunds are essentially the government returning the extra amount you paid in taxes. According to the IRS, more than two-thirds of Americans receive tax refunds.
In summary, a tax return is a form filed with the IRS that reports your income and taxes paid, while a tax refund is the money you receive from the government if you paid more taxes than necessary in the previous year. To get a tax refund, you must first file a tax return.
On this pageWhat is the Difference Between Tax Return and Tax Refund? Comparative Table: Tax Return vs Tax Refund Difference Between Tax Return and Tax Refund
Comparative Table: Tax Return vs Tax Refund
Difference Between Tax Return and Tax Refund
| Tax Return | Tax Refund |
|---|---|
| A tax return is a form that you file with the tax authorities to report your income, deductions, and credits for a specific tax year. | A tax refund is the amount of money you receive back from the tax authorities if you have paid more taxes throughout the year than you actually owe. |
| Tax returns are used to calculate the amount of tax you owe based on your income and tax circumstances. | Tax refunds are the result of overpaying taxes during the year, either through paycheck deductions or quarterly tax payments. |
| Tax returns are filed annually, and they help determine your tax liability. | Tax refunds are issued by the tax authorities after they process your tax return and determine that you have overpaid. |
| Tax return forms typically include tax tables to help you calculate the amount of tax you owe. | Tax refunds can be used to pay for large expenses or to save for the future. |
In summary, a tax return is a form you file to report your income and calculate the tax you owe, while a tax refund is the amount you receive back from the tax authorities if you have overpaid your taxes during the year.
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