Tax refund - wikipedia Tax refund Not to be confused with Tax return. For the United States economic stimulus rebate, see Economic Stimulus Act of 2008. Taxation An aspect of fiscal policy Policies Government revenue Tax revenue Non-tax revenue Tax law Tax bracket Tax threshold Exemption Credit Deduction Tax shift Tax cut Tax holiday Tax advantage Tax incentive Tax reform Tax harmonization Tax competition Double taxation Representation Unions Medical savings account Tax, tariff and trade Economics Price effect Excess burden Tax incidence Laffer curve Optimal tax Theory Optimal capital income taxation Collection Revenue service Revenue stamp Tax assessment Taxable income Tax lien Tax refund Tax shield Tax residence Tax preparation Tax investigation Tax shelter Private tax collection Tax farming Noncompliance Tax avoidance Tax evasion Tax resistance Tax haven Smuggling Black market Transfer mispricing Unreported employment Tax shelter Distribution Tax rate Progressive Regressive Proportional Types Direct Indirect Per unit Ad valorem In rem Capital gains Carbon Consumption Dividend Ecotax Excise Fuel Georgist Gift Gross receipts Income Inheritance ( estate ) Land value Payroll Pigovian Property Sales Sin Single Stamp Steering Turnover Value - added ( VAT ) Corporate profit Excess profits Windfall profits Negative ( income ) Flat Wealth International Financial transaction tax Currency transaction tax Tobin tax Spahn tax Tax equalization Tax treaty Permanent establishment Transfer pricing European Union FTT Foreign revenue rule Trade Custom Duty Tariff Import Export Tariff war Free trade Free trade zone Trade agreement Religious Church tax Eight per thousand Teind Tithe Fiscus Judaicus Leibzoll Temple tax Tolerance tax Jizya Kharaj Khums Nisab Zakat By country List of countries by tax rates Tax revenues as % GDP Albania Algeria Argentina Australia Azerbaijan Bangladesh Bhutan Bulgaria BVI Canada China Colombia Denmark France Germany Greece Iceland India Indonesia Iran Ireland Israel Italy Japan Kazakhstan Lithuania Malta Namibia Netherlands New Zealand Norway Pakistan Palestine Peru Philippines Poland Russia Singapore South Africa Sweden Switzerland Taiwan Tanzania United Kingdom United States Uruguay A tax refund or tax rebate is a refund on taxes when the tax liability is less than the taxes paid. Taxpayers can often get a tax refund on their income tax if the tax they owe is less than the sum of the total amount of the withholding taxes and estimated taxes that they paid, plus the refundable tax credits that they claim. ( Tax refunds are often paid after the end of the tax year. ) Contents 1 By country 1.1 United States 1.2 New Zealand 1.3 India 1.4 Ireland 2 References By country United states According to the Internal Revenue Service, 77 % of tax returns filed in 2004 resulted in a refund check, with the average refund check being $2,100. In 2011, the average tax refund was $2,913. Taxpayers may choose to have their refund directly deposited into their bank account, have a check mailed to them, or have their refund applied to the following year 's income tax. As of 2006, tax filers may split their tax refund with direct deposit in up to three separate accounts with three different financial institutions. This has given taxpayers an opportunity to save and spend some of their refund ( rather than only spend their refund ). Every year, a number of U.S. taxpayers around the country get tax refunds even if they owe zero income tax. This is due to withholding calculations and the earned income tax credit. Because withholding is calculated on an annualized basis, an individual just entering the work force or unemployed for a long period of time will have more tax than is owed withheld. Refund anticipation loans are a common means to receive a tax refund early, but at the expense of high fees that can reach over 200 % annual interest. In the 1990s, refunds could take as long as twelve weeks to come back to the taxpayer ; however, the average time for a refund is now six weeks, with refunds from electronically filed returns coming in three weeks. Some people believe that getting a large tax refund is not as desirable as more accurate withholding throughout the year, as a large refund represents a loan paid back by the government interest - free. Optimally, a return should result in a payment owed of just less than the amount that would cause a penalty charge, which is 100 % of the prior year 's tax ( 110 % for high income individuals ), 90 % of the current year 's tax, or $1,000 for individuals who have direct withholding and do not pay estimated tax. In order to decrease the amount of the tax refund which has to be received by taxpayers, they can turn to one or several of the following methods : adjust the amount of tax the federal government withholds from the paycheck. It is recommended for taxpayers to do this in cases where their adjustments to income, exemptions, and deductions remain relatively steady from year - to - year, and if the government consistently is required to give a large refund. in the case of people entirely exempt from state tax, they can check with their state income tax authority to see if there is an appropriate form that can be completed and filed, which would exempt them from state withholding check tax rates and adjusted gross income thresholds ( applicable if taxpayers are hovering near the bottom of certain tax brackets and changes have been made to the thresholds and / or tax rates ) take advantage of the medical expense deduction ( applicable for medical expenses now imposed for tax years starting in 2013 ) maximizing the amount allowed to save tax - free for retirement However, some people use the tax refund as a simple `` savings plan '' to get money back each year ( even though it is excess money that they paid earlier in the year ). Another argument is that it is better to get a refund rather than to owe money, because in the latter case one might find oneself without sufficient funds to make the necessary payment. When properly filled out, the Form W - 4 will withhold approximately the correct amount of tax to eliminate a refund or amount owed, assuming the W - 4 was filled out at the beginning of the tax year. A U.S. federal law signed in 1996 contained a provision that required the federal government to make electronic payments by 1999. In 2008, the U.S. Treasury Department paired with Comerica Bank to offer the Direct Express Debit MasterCard prepaid debit card. The card is used to make payments to federal benefit recipients who do not have a bank account. Tax refunds, however, are exempt from the electronic payments requirement. However, many U.S. states send tax refunds in the form of prepaid debit cards to people who do not have bank accounts. New Zealand In New Zealand, income tax is deducted by the employer under the PAYE ( Pay As You Earn ) tax system. This information is collected and held by the Inland Revenue Department ( New Zealand ) ( IRD ) and is not automatically processed. However individual earners can request a summary of earnings to see if they have overpaid or underpaid their tax for each given financial year. To claim a tax refund, a personal tax summary must be filed ; this can be done by dealing with the IRD directly or through a Tax Agent. If a personal tax summary is requested in a situation where tax would be owing, a debt is created, so correct calculations prior to this request are important, and these core services are offered by third party Tax Agents. Tax Agents in New Zealand are largely self - regulating, with the Online Tax Association of New Zealand ( OTANZ ) providing guidance and governing rules for New Zealand 's largest 4 tax refund agencies whom serve most of the market for personal tax refunds. India In India, there is a provision of refund of excess tax along with interest. For claiming a refund one has to file the income tax return within a specified period. However, under Sections 237 and 119 ( 2 ) ( b ) of the Income Tax Act, the Chief Commissioner or Commissioner of Income Tax are empowered to condone a delay in the claim of a refund. Provisions of refund of duty exists in indirect taxation. In Section 11 B of the Central Excises Act, 1944 which is also applicable in the cases of Service Tax ( Finance Act, 1994 ). Ireland In the Republic of Ireland, income tax is deducted by the employer under the PAYE ( Pay As You Earn ) tax system. If incorrect tax credits are applied by the employer, then a refund of tax is due. Tax refunds may also be due for income deductions that are applied after the tax year has ended, if one finishes working prior to the year end, or for joint assessment of taxes for a married couple. Tax refunds must be claimed within four years of the end of the tax year if the one is assessed under the PAYE tax system. References Jump up ^ FDIC : FDIC Consumer News Winter 2004 / 2005 Archived September 26, 2006, at the Wayback Machine. Jump up ^ USA Today page 1B published April 13, 2012 `` Tax refund provides cash to file bankruptcy '' Jump up ^ http://www.greenbaypressgazette.com/article/20130104/GPG03/301040162/Changes-don-t-worry-tax-preparers Jump up ^ https://www.irs.gov/businesses/small/article/0,,id=161493,00.html Archived July 15, 2007, at the Wayback Machine. Jump up ^ `` Where 's My Refund ? - It 's Quick, Easy and Secure ''. www.irs.gov. Retrieved 2016 - 09 - 04. Jump up ^ `` Notice 797 Possible Federal Tax Refund Due to the Earned Income Credit ( EIC ) '' ( PDF ). irs.gov. Internal Revenue Service. December 2015. Retrieved September 4, 2016. Jump up ^ Vohwinkle, Jeremy ( June 16, 2016 ). `` Tax Refund Anticipation Loans ''. thebalance.com. Retrieved September 4, 2016. Jump up ^ `` Tax Topics - Topic 152 Refund Information ''. www.irs.gov. Retrieved 2016 - 09 - 04. Jump up ^ Using your 2012 tax - year return to plan for the future Presti & Naegele Accounting Offices Jump up ^ `` IRS Withholding Calculator ''. Retrieved 14 November 2016. Jump up ^ `` Federal government chooses direct deposit and prepaid cards over mailing checks '', BankCreditNews, 15 Apr 2013, Accessed 22 Apr 2013 Jump up ^ `` Whether Board should condone delay if failure to condone delay causes genuine hardship to assessee, no matter whether delay in filing return is meticulously explained or not - Held, yes '' 167 TAXMAN 238 ( ker. ) Pala Marketing Co-operative Society Ltd. v. Union of India WP ( C ) No. 21977 of 2007 ( N ) ( November 26, 2007 ) Retrieved from `` https://en.wikipedia.org/w/index.php?title=Tax_refund&oldid=815162659 '' Categories : Tax terms Tax accounting Hidden categories : Webarchive template wayback links All articles with dead external links Articles with dead external links from September 2016 Talk Contents About Wikipedia Español Bahasa Indonesia עברית Русский Türkçe 中文 Edit links This page was last edited on 13 December 2017, at 04 : 09. 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Question: what do we get in return for paying taxes
Answer: tax refund or tax rebate