How do you get Tax Returns? Doesn't the government spend that money?

Question

Where do they get it from to take 5,000 from someone, then all the sudden give it back?

Answer 1

you can receive a refund because of overpayment of taxes throughout the year, but you also receive refundable credits such as the additional child tax credit and the earned income credit.

These credits could provide you a refund even if you did not have any with holdings during the year.

Answer 2

you are required to pay a certain ammount of taxes per year based upon your income level, anything above that is overpaying. The government uses the money for various things, but at the end of the year they are required to return the overpayment to you. basically you are losing money, and the government is gaining.

learn about investments and returns, and it will make more sense to you on how the government has money, and how you lost money by overpaying your taxes.

edit: consider this

1 million americans overpay their taxes by 100 dollars a month
so thats 100 million right? if they put that 100mil in a 5% rate of return fund over the course of just 1 month thats 5 million dollars per year so 416,666.66 that the government earned on our overpayment in taxes in one month. Free money for the government! But we arent paying enough taxes dangit!

Answer 3

A tax return is the form that you file - are you asking about tax REFUNDS?

You control how much is taken out of your paycheck by what you put on your W-4 form. At the end of the year when you file your tax return, you calculate what you actually owe. If you had too much withheld, then you get the extra back as a refund.

Answer 4

It comes from what you pay into them through the year....and what is taken out of your paycheck depends on how you filled out your W-4 forms. If you overpay through the year, you get it back. If you underpay, you owe the IRS.