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Income Taxes 101: The Difference Between Tax Returns and Tax Refunds - CNET

Information you provide on your tax return is used to calculate your tax Refund.

Angela Lang/CNET
This story is part of Taxes 2022, CNET's coverage of the best tax software and everything else you need to get your return filed quickly, accurately and on-time.

Filing your income taxes in the US can be complicated, especially with this year's changes, which could explain why twice as many Gen Z tax filers are hiring a professional this year. Top-rated tax software can make the process easier, even for free, but learning the basics of income tax filing can help anyone make better sense of their own tax situation.

Let's start with tax returns and tax refunds. The two terms sound similar and can often be confused -- someone might wrongly say their "tax return" has been deposited in their bank account. However, a tax return and a tax refund are different things, and it's an important distinction to know.

Keep reading to see the differences of each term below, and to find out whether you're getting tax money back this year. Also, be aware that April 18 is the deadline for filing your taxes this year. After you file your tax return, here's how you can track the status of your refund.

What's a tax return?

A tax return is a form you file each year with the IRS that gives your adjusted gross income, or AGI, expenses and other financial information. Most of these details come from your W-2 statement, which your workplace provides you weeks in advance so you can file your taxes, but you might also have a 1099 or other form for recording your income. 

Your tax return will include your gross income (which is different from your AGI), how much you've already paid toward taxes (through your company's withholding or estimated taxes that you prepaid if you're self-employed) and other important information you'll need to file your taxes.

However, the tax return will also include things like deductions for your kids, how much you paid in student loan interest, health care coverage, Roth IRA contributions, home office expenses, business expenses and charitable donations. 

You must file a tax return in order to get a refund. However, just because you've filed a return doesn't mean you'll get a tax refund. 

What's a tax refund?

A tax refund is what's issued to you by the US Treasury if, in the previous year, you paid more in state or federal taxes than you needed to. For example, maybe your workplace withheld more money than was actually needed from your paycheck or you're self-employed and wound up overpaying quarterly estimated taxes. 

The government will reimburse you the difference between what you paid (in your tax return) and what you owed as a lump sum payment. Also, any deductions you claim on your taxes can add to the amount you can expect to receive. Here's how to track your tax refund with the IRS.

After you file your taxes, you'll find out if you're getting a refund.

Sarah Tew/CNET

How will I find out if I'm getting a tax refund?

If you use tax filing software or a tax filing service, you'll see a final estimate of how much you should receive after you file your tax return (including if you self-prepare). Once the IRS receives your return, assuming it finds no errors and accepts your return, it'll send you an email or a text message letting you know your final refund amount. That means your money is on the way to your bank account or mailbox. You can track your refund from the time you file your taxes until you receive your payment. Note that it can take anywhere from one to three weeks to get your refund back.

For more information about your taxes, here are 10 tax changes that could affect the size of your refund. Also, here's how to get your tax return done for free.

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This post first appeared on Majorgeeks | #1 Top Software In One Place, please read the originial post: here

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