A tax refund is a reimbursement of excess taxes paid to either the state or federal government. When a person overpays their taxes, they will receive a tax refund from the government entity that they overpaid. Many people look at a tax refund as an interest-free loan from the government. While there are ways to file your taxes in order to avoid a refund and keep more money in your pocket, many people look forward to the possibility of a refund.