What Is a Federal Income Tax Refund?
In the United States, Federal income tax is a percentage of money earned by working or from other sources, such as interest on investments, commissions and payments issued from social security or retirements investments. You will receive a federal income tax if you pay too much income tax throughout the year.BackgroundThere are two ways to pay federal income tax: as a deduction from your pay check, or via direct payments to the IRS on a quarterly basis if you are self-employed. The amount withheld or submitted to the IRS varies based on the estimated taxes you will owe at the end of the year.CalculatingWhen you prepare to file your federal income taxes for the previous year, you add up how much money you made, how much tax you paid and subtract any deductions that the Internal Revenue Service (IRS) allows you to claim. If you paid more than the total amount that you owe, you receive a payment back from the IRS in the form of a federal income tax refund.TypesThe Internal Revenue Service
