Anonymous
Anonymous asked in Society & CultureOther - Society & Culture · 6 months ago

How do tax-returns work?

My parents said most people

get half of their income-taxes

back at the end of the fiscal-year.

Is that true? How does that work?

8 Answers

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  • 6 months ago

    It depends on your income and the amount deducted from your paychecks.

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  • 6 months ago

    If you tell your employer to take out of your paycheck more than what's necessary for your income taxes, then you get back the amount that is over what you owe the IRS. Some people get more than what they paid in due to earned income credit but there is a maximum income to qualify for that.

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  • Foofa
    Lv 7
    6 months ago

    It all depends on how much they're earning, how many dependents they're claiming, how many write offs they have and how clever their accountant is. But yeah, in many cases the federal government gets an interest free "loan" from taxpayers that it then pays back in the form of refunds.

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  • 6 months ago

    Half? Not normally. There are people on the low end of the income scale that don't exceed the "standard deduction" and have significant child credits and deductions who fit that description, but "most" people who get refunds less than 25% of the amount withheld.

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  • 6 months ago

    You get money back at the end of the year only if you have had too much deducted from each paycheck or if you are poor and the government is paying you to work.

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  • 6 months ago

    That means they are having too much money taken out of their pay check to be set aside for income tax. Some people do this on purpose because they lack the willpower to put money into a savings account or just because they like looking forward to getting a fat check every year, even though it's their own money. It would be better if they only had enough money taken out to cover their tax bill and put the extra each month into savings or an investment account like an IRA or 401k that earns money over time.

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  • Jeff D
    Lv 7
    6 months ago

    Not really. People usually get a large tax refund if/when they pay too much in taxes. This happens when their withholding is too high. Some people do this deliberately as a way of forced savings, but the government doesn't pay interest on excess withholding, so it's not a good idea.

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    • Jeff D
      Lv 7
      6 months agoReport

      Some people get large refunds, so while interest rates are low, it's not insignificant. I applaud people saving money, but there are better ways to do it.

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  • Bill
    Lv 7
    6 months ago

    Federal and state taxes are withheld from your check every time you are paid. Once a year you fill out a tax return to find out how much tax you owe. You may get a refund or you may have to pay more.

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