Understanding the Federal Tax Refund Schedule

What is a Federal Tax Refund?

Before we dive into the schedule, let’s quickly review what a federal tax refund is. The IRS issues a tax refund when you’ve paid more income tax during the year than what you actually owe. This can occur through excess withholding from your paychecks or from certain tax credits. The refund is essentially a reimbursement of this overpayment.

How is the Federal Tax Refund Calculated?

The amount of your refund is determined by your total tax liability and how much tax you’ve already paid throughout the year. After you file your tax return, the IRS checks these figures and calculates the difference. If you’ve overpaid, you’ll receive a refund. Conversely, if you’ve underpaid, you’ll owe the IRS money.