Tax Return: Register the According Document Address or Tax Refund? We'll Explain the Difference

It has just appeared on our calendar again -- tax season. During the process of collecting documents and drafting your request, you will come across such words as "tax return" and "tax refund". Despite their similar looks, they are related to two so different themes. Let's break it down:

1. Tax Return: A tax return is the form you submit along with the government, which is generally the IRS in the USA, on what income you had, what costs you incurred, and other information that you might have concerning your financial affairs for the previous year. To put it all together, it can be described as a form of document filing that helps you know how much tax you owe or how much refund you are entitled to.

2. Tax Refund: However, a tax refund is another case when you receive money from the government back if you have overpaid on taxes in the year. This mostly happens when your employer over-withholds taxes from your payslips or you qualify for certain tax credits or deductions that lessen your tax debt due to exemptions or other benefits.

The tax return is the statement of all the financial activities you've been involved in, while the tax refund is the amount that will be returned to you when you have been overpaying.

Recognizing the separation between these terms is of utmost importance when doing the tax return yourself or hiring an accountant. Thus, in case you’re an end operator completing the form or waiting patiently for your tax refund—it may be both or just one of them!

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