Tax Refunds

A tax refund occurs when you’ve paid more in taxes through payroll withholding or estimated payments than you owe for the year. After filing your tax return, the government calculates your exact tax liability. If you've overpaid, they return the excess amount to you as a refund. Essentially, it’s your money that was temporarily held by the government during the year, and the refund is a repayment of that surplus once your full tax situation is settled.